I read of someone else having this problem. it definitely is a problem with the additional locations options as that is what it mentions - that it is having trouble with additional locations of one of the users. This is definitely a problem that has to be fixed. Never had this problem with vista backup and restore. I undid the check mark on all additional locations as mentioned to a previous writer but hopefully you can come up with a fix for this

Hi ggma1126, I'd like to inform you that the error 0x81000038 refers to "requested resources are not available". You can re-connect the drive on different USBport and see if the backup success. Meanwhile, please check the solutions in the following thread: Backup Error 0x81000038http://social.technet.microsoft.com/Forums/en-US/w7itprosecurity/thread/afae1de9-0633-4dc7-8973-9592ce97ef27Hope this helps!Sean Zhu - MSFT

it is now working thanks to a fix I read somewhere else had to uncheck all locations