Windows 7: Can't Backup

When ever I run a windows backup I get the following error. Please help me.

Just a guess but the only time I have seen the "too deeply nested" error was when the folder was 12 levels deep and not in Path. I think there is a finite limit to the number of characters path can read. Have you tried:
1- at a cmd prompt type path and see if your backup folder is included in the statement. It should be something like path=c:\windows,...your back up folder name
2- try putting the folder somewhere else (diff drive, on desktop) Just guessing though