NIS 2012 not enough quota message when transferring files to other hard drive

Just upgraded to NIS 2012.  Backing up my drive by transferring "My Documents" folder to another drive but I get Windows XP message that there isn't enough quota to continue.  Always when transferring tiny files (clipart etc).

 

I have 4gb RAM and 4gb paging file so plently of capacity.

 

Transferring files works fine if I disable auto protect

 

Machine HP quad core 2.5 ghz, 4gb ram.  Windows XP SP3