Although cooperative diversity (CD) systems are widely considered in recent wireless communications standards, little research has been undertaken on their performance under practical conditions. In this study, we study the impact of the channel estimation error on the performance of the multilevel quadrature amplitude modulation (M-QAM) based regenerate-and-forward CD systems. In addition, we investigate the effect of user mobility on channel estimation. After a pilot symbol assisted modulation is proposed for CD systems, the analytical BER performance of the proposed CD system is derived and results are verified via simulations. Numerical results demonstrate that estimation error degrades the performance of CD systems. Furthermore, the inter-user channel estimation error has greater impact on the performance of CD systems than that of the user-to-base station channel. Moreover, the choice of pilot symbol insertion period is crucial and it trades effective data rate for BER performance.