If your server has a tape drive, backing up to a tape drive is selected by default and is recommended. Using a tape drive enables you to inexpensively store backup files and employ a rotation schedule that will help protect you from data loss in the event of a system failure or natural disaster because you can store the tapes offsite.
If your system does not have a tape drive, that selection is unavailable and you must browse to, or type, a path to a hard disk. You can elect to use internal, network, or removable hard disks. It is recommended that you not use the hard disk where Windows Small Business Server 2003 is installed, even if you store the backup files on a different partition. You cannot back up to the system drive. In this case, you must back up to another partition on the hard disk or to a shared folder on the network.
You cannot back up to a floppy disk or to a writable CD or DVD drive.
If you do not have a tape drive, it is recommended that you back up the server to a hard disk until you can purchase a tape drive. The Backup Configuration Wizard backs up the entire server, so the location must have enough free disk space available.
When backing up to hard disk, ensure that the following permissions are set for the SBS Backup User and Domain Admins:
NTFS: Read and write