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this error can occur if the shadow copy services are not running, the backup applications and system restore depend on these services as well. you may do the following:

•open control panel
•click the classic view in the tasks pane
•double click administrative tools
•double click services
•look for the microsoft software shadow copy provider and double click it
•in the start up type menu (select automatic)
•in the start button click it
•click apply and then ok
•look for volume shadow copy service and perform the same procedure
•exit and reboot the computer

source: cnet forums

Hope the above helps.