One of the compelling reasons I tell customers and friends for upgrading from Windows
XP to Windows Vista is the extremely easy to use yet powerful backup feature. All
it takes is three clicks to backup your entire computer to a removable USB storage
or DVDs. You can backup a partition or folders to another partition. And the entire
backup procedure for few hundred gigabytes of files takes less than an hour the first
time itself, after that the incremental backup get done in minutes. The best part
is that the backup is stored in VHD (Virtual PC format) format, which is a fully documented
and free to use file specification. This means even if Microsoft restore utility is
unable to open the VHD file, some 3rd party utility may be able to open it. I have
been using the backup feature for nearly a year and I am very pleased with it. Recently
when I had trouble with Windows in my Home PC, I restored my backup that was taken
few months back - the entire restore process worked flawlessly and my Windows installation
was good as new. 
Today before I did a routine backup of my Home PC, I wanted to clear some space in
the external USB drive. I deleted all the previous backup files in the drive. Then
I ran the complete back up. Unfortunately after several minutes the backup utility
failed with the following strange error.
The backup did not complete successfully. An error occurred.
The following information might help you resolve the error:
The system cannot find the file specified. (0x80070002)
I tried doing Vista Disk cleanup, no use. Doing few Internet
searches with the error number 0x80070002 I found a forum post
that talked to clean up registry keys in HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows
NT\CurrentVersion\ProfileList that pointed to orphan profile paths. I checked
that, in my case all the profiles had correct paths. So that was not the problem.
Then one of the forum post talked about running Chkdsk on the drives,
I did that. Rebooted the machine. Tried the backup again, this time it went smoothly.
Now my love is back for the Vista Backup tool. I just wish Microsoft wrote the backup
utility a little bit more tolerant or instructive error messages for handling these
occasions.
Read the complete post at http://www.venkatarangan.com/blog/2008/06/15/Vista+Backup.aspx