How to solve: Windows could not find backup devices on your computer. [...]
If you get this error message trying to backup your Windows Vista system via the "Backup Status and Configuration" wizard,
"Windows could not find backup devices on your computer. The following
information might explain why this problem occurred:
Incorrect function. (0x80070001)
Please close the backup application and try again."
you should call the Computer Management console and choose "Mark Partition as Active" from the context menu of the partition where your Windows files are located. Doing this, solved the problem for me.