Unable to complete backup - Error 0x80080005

Hello?  Is anyone at MS listening?  This answer does not work.  Now am up to 12 hours on the phone with MS in India and Texas... Have reinstalled OS.  Have uploaded numerous log files. 

Summary: there might not be a solution other than a clean reinstall of OS, and all apps.  Ugh.

 

Update - June 25, 2011:  spent another six hours on the phone with MS: FIXED!.  Solution: manually set all permissions in "System Volume Information" to SYSTEM.  You must do each and every item in the folder separately. If you miss one, backup will fail.

 

Update - July 15, 2011: has worked well for 10 times now.  No problems, and can restore also.

This issue can be caused by third party conflicts, let’s try Backup in Clean boot mode.

Clean Boot
======================
This method will help us determine if this issue is caused by a loading program or service. Please perform the following steps:
1. Click the Start Button and type "msconfig" (without quotation marks) in the Search Box and press Enter.
2. Select the Services tab in the open window. Check the “Hide all Microsoft Services” option and click Disable All.
3. Switch to the Startup tab and click Disable All.
4. Click OK to save the settings and select Restart when prompted.
5. Check whether or not the error still occurs.

Note: Temporarily disabling the Startup Group only prevents the startup programs from loading at startup. This shouldn't adversely affect the system or other programs. We can still manually run these programs later.

In addition, you can try to backup a small file using the following steps to test this issue.

1. Open Control Panel ans start creating a backup from the Backup and Restore center.
2. Select the Location in order to save backup data.
3. Once you have chosen your location, you can now choose what to backup. let's choose the option "Let me choose".

Note: uncheck the option before the "Include a system image of drivers: Unnamed driver".

4. Now you can start your backup process.

For More Information and help related to windows 7 issues click here