Error Message for the backup log states the following:
===================================

Volume shadow copy creation: Attempt 1.
Timeout before function completed
Error returned while creating the volume shadow copy: 0xffffffff.
Error returned while creating the volume shadow copy: ffffffff
Aborting Backup.


Event Logs Show:

Event Type: Error
Event Source: NTBackup
Event Category: None
Event ID: 8019
Date: 12/16/2006
Time: 11:05:07 PM
User: N/A
Computer: Server Name
Description:
End Operation: Warnings or errors were encountered. Consult the backup report for more details.
For more information, see Help and Support Center at
http://go.microsoft.com/fwlink/events.asp.


Event Type: Error
Event Source: VSS
Event Category: None
Event ID: 12302
Date: 12/16/2006
Time: 11:00:08 PM
User: N/A
Computer: Server Name
Description:
Volume Shadow Copy Service error: An internal inconsistency was detected in trying to contact shadow copy service writers. Please check to see that the Event Service and Volume Shadow Copy Service are operating properly.
For more information, see Help and Support Center at
http://go.microsoft.com/fwlink/events.asp


Resolution
==========
1) Open a command prompt and change to \windows\system32
2) Stop the VSS admin servcie: Net stop VSS
3) Regiter the following dll's:

regsvr32 ole32.dll
regsvr32 vss_ps.dll
Vssvc /Register
regsvr32 /i swprv.dll
regsvr32 /i eventcls.dll
regsvr32 es.dll
regsvr32 stdprov.dll
regsvr32 vssui.dll
regsvr32 msxml.dll
regsvr32 msxml3.dll
regsvr32 msxml4.dll

4)Start VSS admin servcie: net start vss

Test the backup again!!!

dude you are a life saver. problem is fixed.

I am glad it helped..Feel free to post any other issues u have