How to resolve SQL Server 2000 trans log backup failure with "Server: Msg 3202, Level 16, State 1, Line 1"

I inherited a SQL Server 2000 environment and am scrambling to give it some care and feeding. Backups had not completed successfully for a long time. Therefore, even though the databases are all of a reasonable size, under 1GB, one database transaction log has grown to 16GB.

I was able to backup all of the databases successfully. However, one database has a HUGE transaction log file. WHen I tried to back it up, it failed after 45 minutes.

The command I used to back it up is: backup LOG TRACKIT70_DATA1 to DISK='C:\Tibackup\SQL_SERVER_BACKUPS\TRACKIT70_DATA1_TLOG_backup-1.trn'

-- Tlog backup failed with this message:
Server: Msg 3202, Level 16, State 1, Line 1
Write on 'C:\Tibackup\SQL_SERVER_BACKUPS\TRACKIT70_DATA1_TLOG_backup-10012014-1.trn' failed, status = 33.
See the SQL Server error log for more details.
Server: Msg 3013, Level 16, State 1, Line 1
BACKUP LOG is terminating abnormally.

I have these from SQL Server error log :
BackupMedium::ReportIoError: write failure on backup device 'C:\Tibackup\SQL_SERVER_BACKUPS\TRACKIT70_DATA1_TLOG_backup-1.trn'.
Operating system error 33(The process cannot access the file because another process has locked a portion of the file.).

BACKUP failed to complete the command backup LOG TRACKIT70_DATA1 to DISK='C:\Tibackup\SQL_SERVER_BACKUPS\TRACKIT70_DATA1_TLOG_backup-1.trn'

Internal I/O request 0x63E94A38: Op: Write, pBuffer: 0x06480000, Size: 983040, Position: 10659940864, UMS: Internal: 0x103, InternalHigh: 0x0, Offset: 0x7B61CA00, OffsetHigh: 0x2, m_buf: 0x06480000, m_len: 983040, m_actualBytes: 0, m_errcode: 33,  BackupFile: C:\Tibackup\SQL_SERVER_BACKUPS\TRACKIT70_DATA1_TLOG_backup-1.trn

I think that the drive where everything "lives" is using compression and that might be part of the problem.

The question I have is how to get the Tlog to backup?

Should I change the recovery model from FULL to SIMPLE and issue another database backup?
Should I try to split the transaction log backup into multiple files/devices?
Should I get a network share set up and write the backup to it?

I'm a newbie when it comes to SQL Server and Windows so please be understanding.

Thanks!