On searching, i came across this interesting writeup here about the effect.The writeup also explains why the phenomenon is called so -
An automated spelling checker attached to a word-processing program is one of the curses of our times. In the hands of an inexperienced, over-hasty or ignorant user it readily perpetrates dreadful errors in the name of correctness. One example appeared in a piece in the New York Times in October 2005 about Stephen Colbert’s neologism truthiness: throughout it instead referred to trustiness, the first suggestion from the paper’s automated checking software. In September 2006 an issue of the Arlington Advocate included the sentence, “Police denitrified the youths and seized the paintball guns.” The writer left the first letter off identified and the spelling checker corrected what remained.
In 2000 the second issue of Language Matters, a magazine by the European Commission’s English-language translators, included an article by Elizabeth Muller on the problem with the title Cupertino and After.
Cupertino, the city in California, is best known for hosting the headquarters of Apple Computers. But the term doesn’t come from the firm. The real source is spelling checkers that helpfully include the names of places as well as lists of words. In a notorious case documented by Ms Muller, European writers who omitted the hyphen from co-operation (the standard form in British English) found that their automated checkers were turning it into Cupertino. Being way behind the computing curve, I’m writing this text using Microsoft Word 97, which seems to be the offending software (more recent editions have corrected the error); in that, if you set the language to British English, cooperation does get automatically changed to Cupertino, the first spelling suggestion in the list. For reasons known only to God and to Word’s programmers, the obvious co-operation comes second.
Hence Cupertino effect for the phenomenon and Cupertino for a word or phrase that has been involuntarily transmogrified through ill-programmed computer software unmediated by common sense or timely proofreading.
A search through the Web pages of international organisations such as the UN and NATO (and, of course, the EU) finds lots of examples of the canonical error. A 1999 NATO report mentions the “Organization for Security and Cupertino in Europe”; an EU paper of 2003 talks of “the scope for Cupertino and joint development of programmes”; a UN report dated January 2005 argues for “improving the efficiency of international Cupertino”. And so on.
Other notorious examples of the Cupertino effect include an article in the Denver Post that turned the Harry Potter villain Voldemort into Voltmeter, one in the New York Times that gave the first name of American footballer DeMeco Ryans as Demerol, and a Reuters story which changed the name of the Muttahida Quami movement of Pakistan into the Muttonhead Quail movement.
It could be worse. Leave out one of the os from the beginning of co-operation as well as the hyphen and you might be offered not Cupertino but copulation. Now that would be an error to write home about. Or perhaps not.