VSS Error - Catastrophic failure

I am using SBS 2003 Server SP2 and I am having a problem since before SP1 on this server. If I am trying to backup anything then it instantly fails with the below error message:

Backup Status
Operation: Backup
Active backup destination: File
Media name: "backup6.bkf created 11/27/2007 at 10:46 AM"
Volume shadow copy creation: Attempt 1.
Error returned while creating the volume shadow copy:0x8000ffff.
Error returned while creating the volume shadow copy:Catastrophic failure
Aborting Backup.

In the event log I get an error VSS 12289
Event Type: Error
Event Source: VSS
Event Category: None
Event ID: 12289
Date: 11/27/2007
Time: 11:07:07 AM
User: N/A
Computer:
Description:
Volume Shadow Copy Service error: Unexpected error RegOpenKeyExW(HKLM,SYSTEM\CurrentControlSet\Services\VSS\Providers,0,KEY_ALL_ACCESS,&ptr). hr = 0x80070002.

Also, when I go to a VSSADMIN list writers then I get C:\Documents and Settings\Administrator>vssadmin list shadows vssadmin 1.1 - Volume Shadow Copy Service administrative command-line tool (C) Copyright 2001 Microsoft Corp.
Error: Unexpected failure: Catastrophic failure

There is also another problem, when I look at the properties of any drive and then go to the shadow copy tab then I can see no options but an error message 0x8000ffff Catastrophic failure. Is there any solution for this problem? Thanks

Did you check that an update rollup package is available to resolve some Volume Shadow Copy Service (VSS) snapshot issues in Windows Server 2003. You can download the same from this link - http://support.microsoft.com/Default.aspx?kbid=940349

I would suggest you to reboot your server and see if the error messages come back again or not. After that run chkdsk /f on the server and restart the server and check again whether the error comes again. Have you installed Service Pack 1 on the server that is having this problem. Can you try to run vssadmin list writers command and post the output here. Also try to run diskpart and then run list volume and give us the results.

Can you try to change the registry key and see if that works. To do that click on Start and then in the Run box type regedit and press Enter. After that locate this registry key: HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\VolSnap. Go to the Edit Button and point to New and then click DWORD value. Now type MinDiffAreaFileSize and then press Enter. Again go to the Edit Meny and click on modify. After that try to tyoe the size for example 1200 which you want for the shadow copy storage area and then click ok.