Hi guys and gals,
I hope some of you experiencinig VSS problems and are as frustrated with the solutions as I am find these tidbits helpful.
After trying everything listed by all the experts, the following steps solved my issue on a Win2k3 Server SP2 x86 machine:
1) Do all the other stuff first.
2) Under HKLM\System\CurrentControlSet\Enum\Storage, Assign your admin account full control of this key.
3) Wipe out everything under the "VolumeSnapshot" key.
4) Under the Volume key, find the identifier that refers to your volume using diskpart, and make sure the service entry is "volsnap".
5) (and I think this is the key) Using diskpart, do a "select volume 0" (assuming it's volume 0 you want to manipulate) and THEN issue the command "att vol set shadowcopy"
6) VERIFY that Shadow Copy is "Yes" by doing a "detail volume"
After a reboot my shadow copy started working perfectly.