Windows 7 Backup fails after a few seconds

If you observe the following behavior:

Windows 7 Backup fails after a few seconds with an “Insufficient Space" message and error code 0x81000033

Error Message:

“Windows Backup skipped backing up system image because one of the critical volumes is not having enough free space. Free up some space by deleting unnecessary files and try again.
Error code: 0x81000033”

Reasons:

The problem is caused by lack of free space in the hidden ‘system reserved’ partition (that Windows created).

How to fix:

Enlarge the hidden ‘system reserved’ partition (e.g. to 350 MB).

Further information:

• For a more detailed description and step-by-step instructions how to resolve this, refer to this article: http://www.pagestart.com/win7br0x8100003301.html