I got this event when backing up on a removable hard drive using the FAT32 file format. The problem was related with the 4GB file-size limit on FAT32. I solved this by formatting the disk with the NTFS file system instead.
From a newsgroup post: "This issue may occur if you have installed Veritas Software on your SBS 2003 server. If this is the case, please remove the program to see if it fixes the problem.
The issue can also be caused by the incorrect content of the “script.bks” file. Open the Small Business Backup Script.bks file with the notepad. If you see:
JET SERVERNAME\Microsoft Information Store\Recovery Storage Group\ ,
this problem will appear because NTbackup is not able to back up the Recovery Storage Group either via the script or directly via the NTbackup GUI. To correct it, you can use NTbackup to remove Recovery Storage Group reference from the backup selection script:
1. Start -> Run -> NTBackup -> Advanced Mode -> Backup tab -> Job -> Load Selections.
2. Select Small Business Backup Script.bks
3. Click OK on the error message: “Some invalid selections found in C:\Program Files\Microsoft Windows Small Business Server\Backup\Small Business Backup Script.bks”.
4. Job -> Save Selections".
This is a general error for Small Business Server 2003 backup. You have to read the complete registry log of the backup to troubleshoot this issue. In one case this error was reported because some data could not be read during verify operations; problem caused by a faulty tape.