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Can't do backup - all files on C: are set to Read Only

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Windows 7 Ultimate.
Have tried to go in and manually unset read only and apply to all subfolders and files. It looks like change is made, but upon reopening folder properties Read Only is set again.
Copying folders to another HD will fail with message that folder/file is read only.

Recently installed SugarSync. Haven't tried uninstalling it.

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Nick,

Windows locks many of the files that are on the C:\partition. Therefore, many file-based backup/syncup apps will fail to properly access them. Similarly, if you were to just "copy back" these files on a corrupted or blank disk, your system will not work right and you will have plenty of issues.

You need to do a disk and partition backup (aka an image) of your system disk. If your disk dies, you will boot your computer on the ACronis recovery CD and recover the image on any new disk and your system will be as it was at the time of the backup.