This is very specific to Sony Ericsson PDA phones (mine is P1i).
If you encounter any of the following behavior while taking a backup -
- 10000080 - Mobile phone not responding.
- settings cancelled by the device
- Cancelled by device.
- Failed.. etc.
Delete all old backup files and then take a new backup. If you don't want to loose old backups then you should first export them and then delete. Exported backups can be imported back any time.
I kept on struggling for days and then finally decided to Master Reset my phone. Fortunately I came across some threads on the internet where people have faced same problems and while I had tried everything else, only this was the remaining thing. And it works!