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Solution

For Windows XP try deleting all system restore points except the most recent. Please see here for more information: http://support.microsoft.com/en-us/kb/555367

For all other Windows Operating Systems please follow the steps below:

1. Open a Command Prompt. See  Running an elevated command prompt
   
   

2. In the command prompt, type the following:

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   language text
   vssadmin delete shadows /all

   
       and press enter. This clears all previous snapshots from the system.
      
   

3. Once this process completes, retry the backup and VSS should be working.