Hi Peter,
I came across this same error previously when we first installed 6.61 on Windows 2000 and I can't remember the exact fix. I believe it was 1 of 2 scenarios:
1) Go into Windows 2000 services and check how the service is configured. Typically it is configured to use the local system account. Change this to use your local Arcserve account by providing the user ID / Password (Logon using ... settings). Stop and restart all services and I believe this will fix the problem.
2) Check the local Arcserve directory on the harddrive and apply local NTFS settings to the directory specific for the arcserve account on all files / folders below the root directory.
Let me know if this helps!
Thanks,
Darryl Brambilla
EDS Canada
Calgary, Alberta