Recently a colleague had a client who had errors performing backups and restores in Central Administration. The jobs showed as failed, the timer would seemingly hang, and you could not delete the job. He said the account used was a local admin, was an admin in SQL, et cetera. Although an account may be a local administrator, that does not mean the account is not affected by policies.
Here is what I suggested that they do with the server administrator. (I like to let them run the commands with me, since they generally will insist that it should work, and they can see potentially where the policy needs to be changed).
To test if the user has access to perform a backup, use the account SharePoint has and run the stsadm utility for a backup.
If you see a message like this:
C:\Program Files\Common Files\Microsoft Shared\web server extensions\12\BIN>stsadm -o backup -backupmethod full -directory "\\vanilla\Backup"
Access to the path '\\vanilla\Backup\spbrtoc.xml' is denied.
C:\Program Files\Common Files\Microsoft Shared\web server extensions\12\BIN>
then you are failing with the permission to access the UNC path.
You should get the service account that was used to connect to the database in the original instance (or one with little policy limitations). Log onto the server using this account. The account should be able to access the database server from the SharePoint server running the sts commands, and be able to do the reverse; go from SQL to the SharePoint server. This will give the stsadm utility the service account to use with the connection object.
If you can perform the backup procedure of a site you will have found your problem. To fix you will need to check the policies for the account that is registered with SharePoint.
If you can execute the stsadm utility and begin the process of backup, then watch the commands that scroll through the window - there will be some SQL statements for the execution of the backup. You can analyse these further to see which part of the connection is failing. And read the log files.