I have noticed the above error keeps popping up in the Application event log of our SharePoint server so I decided to track down the problem. Initially I thought it might be application pool based but it turns out it is the ‘Microsoft SharePoint Services VSS Writer’ service that is causing the problem.
I found the solution over at the TechNet forums –
It seems the solution is to change the identity for the service to run under the SharePoint Active Directory farm account rather ‘local system’ which is the default.
After you change the identity, restart the service and the error should no longer keep bothering you.
Hope this helps someone!