So after my last post I had pretty much given on the Windows 7 backup. But then for some reason I got the suspicion that the hard drive I was using might be faulty. So anyway, I did a full scan disk and it did in fact find some bad sectors on the disk.

So I switched to another external disk and tried the whole thing all over again.. and it worked! Well, almost. For some reason it still kept complaining about a non-existant directory, C:\Windows\System32\config\systemprofile\Web Development

Anyway this site gave me an obvious but useful solution: just create the empty folder it’s looking for! So I did and now it works properly without complaining. It’s still not my only backup, but it’s good to know I at least have it in case I need it.