What's seems to have happened is that the SQLVDI.dll files in the 2 directories:
C:Program Files (x86)Microsoft SQL Server80COM C:Program FilesMicrosoft SQL Server80COM
are out of sync. This seems to have happened as a result of a service pack for MSSQL which was applied in Dev.
The Microsoft Sequel VSS writer is unable to initialize correctly and as a result of this interface not functioning properly, SQL Backup is unable to initialize.
In order to get the versions of the SQLVDI.dll in sync again I copied the latest SQLVDI.dll from another server unregistered the out of sync version and reregistered the matching version. The SQL Backup service failed to start.
This problem is on Microsoft Sequel 2005 SP2 running on Windows Server 2008 on Windows Hyper V platform. Microsoft released an untested patch for this problem, however, it says that the patch is not applicable when I attempt to run it on the system. I then put everything back as it was (out of sync) and the service runs but cannot backup or restore.
By completely uninstalling Microsoft Sequel server including workstation components, VSS writer, Database Engine, Integration services and Full Text search engine, Red Gate Backup and then deleting all folders relevant to these installations, rebooting and reinstalling everything again, solves the problem. An uninstall of just the Database engine and Red Gate Backup does not solve the problem.
Anyway, uninstalling everything isn't a solution. Have uninstalled and reintsalled VSS writer by itself.
I've tried everything and nothing. Even tried to switch the reg key enabling VSS SQL Writer in an attempt to get it to use MSDE writer instead and no go. I'll try anything at this point...