A of mine had this problem I asked him and his answer is below...hope that helps

The two errors 0x81000029 and 0x80070001 are related
to the same problem. I used the instructions from the following link to solve
the problem. Within 5 minutes everything became just perfect. The link is:
http://www.microsoft-tech.com/index.aspx?content=22
Happy Backup everybody

thank you for your sugestion, but the link you wrote me doesn't work.

Any other idea???

I'll wait for the answer.

Thanks 

Well, I emailed him and the link didn't work for him either, the server that is based on didn't come up either but he did find the microsoft kb article that it took him to and it is below...

http://support.microsoft.com/kb/950167

WITH MY INSPIRON 6400 AND WINDOW VISTA SP1 THERE IS NO WAY TO MAKE A BACKUP ON DVD OR EXTERNAL HARD DISK. i KEEP RECEIVING  error 0x81000029. ANY SOLUTION??? THANK YOU

Hi,

Please let me if the error message that you receive is for windows back-up or using different software to back up data.

If yes, use the following link to check if you are able to back-up: http://support.microsoft.com/kb/950167