Some of you (that have a specific setup) might have noticed that you have an extra profile in your Windows 7 C:\Users directory. MCX1-%COMPUTERNAME%. I noticed mine when it started adding the following line into my backup results:
The backup completed but some files were skipped.
Backup encountered a problem while backing up file C:\Users\Mcx1-CPL-SHOE\Contacts. Error:(The system cannot find the file specified. (0×80070002))
Backup encountered a problem while backing up file C:\Users\Mcx1-CPL-SHOE\Searches. Error:(The system cannot find the file specified. (0×80070002))
I wasn’t sure why that profile existed in the first place, and didn’t appreciate it mucking up my backups. I was poised to just delete it, when I realized that might be a silly move. Research twice, delete once. (see item #9 under ‘Set up Xbox 360 as a Windows Media Center Extender’)
So the profile was legit, it was created when I connected Media Center to my Xbox 360. So how do I make my backups quit complaining? What if I just made the folders? Would that satisfy it? It turns out it does. I created two empty folders named C:\Users\Mcx1-CPL-SHOE\Contacts and C:\Users\Mcx1-CPL-SHOE\Searches, and it was happy.
After all this, I ran across this Microsoft article which goes into much more detail about why backup wants to back up those folders despite their non-existence. But in my humble opinion, just create the folders and move on unless you want to spend your weekend optimizing your registry.

Thanks, this helped me alot!
Thanks. This was perfect!!! Worked like a charm.
Oh, I see now. Thanks for this. Bloody Xbox. It’s not even mine!
Oh wow, thank you so much. I was about to erase this when I remembered that as a noob to the inner workings of my computer, that probably wasn’t a great idea. (Exactly why my computer is so slow; I’m afraid to turn off the crazy amount of processes Vista has running.)
Phew, I thought it was a virus.
Haha, nice. I was about to delete it too.