Backups Failing - Cannot create recovery points for job

To resolve this issue we did this - 

For Windows 2000 and 2003 System I followed following two Registry settings:

Registry setting 1

1.       Click Start, click Run, type regedit in the Open box, and then click OK.

2.       Locate and then click the following registry subkey:

HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Session Manager\Memory Management

3.       On the Edit menu, point to New, and then click DWORD Value.

4.       Type PoolUsageMaximum as the entry name, and then press ENTER.

5.       Right-click PoolUsageMaximum, and then click Modify.

6.       Click Decimal.

7.       In the Value data box, type 40, and then click OK.

And

1.       Click Start, click Run, type regedit in the Open box, and then click OK

2.       Locate and then click the following registry subkey:

HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Session Manager\Memory Management

3.       On the Edit menu, point to New, and then click DWORD Value.

4.       Type PagedPoolSize as the entry name, and then press ENTER.

5.       Right-click PagedPoolSize, and then click Modify.

6.       Click Hexadecimal.

7.       In the Value data box, type a value of FFFFFFFF, and then click OK.

For Windows 2008 I only followed:

1.       Click Start, click Run, type regedit in the Open box, and then click OK

2.       Locate and then click the following registry subkey:

HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Session Manager\Memory Management

3.       On the Edit menu, point to New, and then click DWORD Value.

4.       Type PagedPoolSize as the entry name, and then press ENTER.

5.       Right-click PagedPoolSize, and then click Modify.

6.       Click Hexadecimal.

7.       In the Value data box, type a value of FFFFFFFF, and then click OK.

It is now working fine.