Backup Project seems broken in 5.5.3

Screen shot 2012-05-03 at 12.04.23 PM.png
Just tried to use Back Up Project from the File menu. It starts fine and begins to populate the new folder and then stops. I get a dialog box that says "Error!.. (see attached). Anyone else noticed this behavior?

Works fine here (PC, XP/32).
Seems strange though. What’s in the pool?

Do you have the correct permissions? Is the disk full? It’s working fine here too.