Go to device manager and from the View menu enable "Show Hidden Devices" then you will see "Storage Volume Shadow Copies" devices , then delete (uninstall) all the "generic volume..." devices under the " Storage Volume Shadow Copies" then restart pc and after restart goto system protection and wait for Windows to create the devices you have deleted before the boot. After this step create a recovery point because all of the shadow copies have been deleted and reconstructed. YMMV.

The other error sounds like Malware.

There's a very strong possibility that you have a Vundo infection, which is
usually accompanied by ZLOB and/or SDBot infections, all of which are
protected by a rootkit.

1. See if you can download/run the MSRT manually:
http://www.microsoft.com/security/ma...e/default.mspx

I have alro ran chkdisk yesterday and the drive is only 13% used. No errors from running chkdisk.

Thanks for the advice. I saw this same advice on another forum. When I go to Device Manager and then view and then show hidden devices I cannot see 'Storage Volume Shadow Copies'. All I see is 'Storage Volumes' and when I expand this all I see is 7 entries for generic volume.

What could this mean?

If its not malware it could also be a FULL and or Physically Damaged Drive that would need to be replaced.

Also thanks to you too. I ran a scan last night with TDSS Killer and it came back clean. I will try your advice now with the Malicious Software Removal Tool.

Malicious Software Removal Scan came back clean, but at the same time MS Security Essentials had a popup claiming to have found and quarantined a java exploit. Problem still remains.

Dells are very bad it hides problems while running lots of spyware and Malicious Software.  Sell it.

Dont buy a Dell!  HP is the way to go now.

Dell will not help you.  Always go to HP.  They will.