Can't backup system state

Klingonwork,

As you must be aware a Domain controller has 2 kind of policy stored

1> Domain Policy

2> Domain Controller`s Policy 

The above is true for both 2003 and 2008 version of Microsoft Windows Server

Considering you case you have a Win2003 DC that you are backing up, you might want to try this

Navigate to the domain controllers policy (not domain policy)

Navigate to Security Settings >Local Policies and the User right assignment look for these rights and add the domain admin account that you are using to backup the system state of the 2003 DC

• Authenticate as any user and gain access to resources under any user identity OR Act as a part of Operating System 
• Logon as a batch job
• Create a token object, which can then be used to access any local resources
• Log on as a service
• Administrative rights (provides complete and unrestricted rights to the computer)
• Backup operator rights (provides rights to restore files and directories)
• Manage auditing and security log

From the command prompt of the 2003 DC run > Gpudate/force <hit enter> command, run the same command on the Backup exec server too

If it still fails to backup 

Repeat the same steps with Domain Policies (Not the domain controller policy this time as its already done) 

Restart all the backup exec services

Run the backup.