Thanks for your suggestions ...
My temp directory is located on C: which currently has 13GB free ... so I don't think that would be causing an issue. I noticed my disk use under the Windows Task Manager monitor crept up to about 700MB (or about 75%) during the operation ... don't know if that's relevant to anything?
Nothing else should have tried to access the file - the file was created using the MS Outlook backup add-in which basically just takes a copy of your pst file and puts it somewhere. However, I also closed Outlook just to be sure it hadn't retained any file locks or anything like that on the backup pst file. Smaller backup pst files are processed no problems.
My antivirus is AVG which is scheduled to run at 6pm each evening so that shouldn't have interferred with Acebit's processing either.
Weird huh? Oh well, I just ended up using another program (SecureIT) which compressed & encrypted the file in about 15-20 minutes.
If I could however, I'd like to just use one program to do my entire backup because then this could occur overnight and wouldn't need any manual intervention in the morning!
Unfortunately, I can't use SecureIT to do everything either as the version I have falls over when processing so many files! It's not easy!
Thanks