Thanks Novak, I turned off the firewall and antivirus. Cold Reboot. VSS does not start. SFC reports no bad files. Copy problem remains. A couple of times the error that popped up was."Too Many files open. Try closing some programs and try again". (This makes no sense, since no other programs or processes are running other than whatever the system has running) As stated in the beginning of the thread, I have seen this error before, especially when I tweaked the IRPStackSize in the registry (The only article I found regarding 0x8007046a suggested increasing the registry value) It did not solve the problem and the registry has been restored to default. Besides, since this is a system copy/paste, it's up to the OS to manage the files, file handles, memory and whatever overhead goes along with copy/paste. BTW, this is the second clean install of Win7 Pro x64. After the first install, being unable to solve the problem, I reformatted the c: partition and did a clean install of Win 7 Pro X86. Still had the same errors with the 32 bit version. After another reformat and clean install of Win XP (32 bit), the problem does not occur. But my desire is to run Win 7 Pro x64, so once again I reformatted the drive, and did a clan install of Win 7 x64. The error, of course, returned. I'm open to trying the "In-Place upgrade" if you think it may shed some light on what's going on. Thanks, KenC