One additional piece of information. This server was renamed after SQL 2005 was installed. I then dropped the sql server and recreated it using the following commands
sp_dropserver <old_name>
GO
sp_addserver <new_name>, local
GO
Could this be related to this issue. However, before upgrading to SP2 (Done some time after renaming) the backup jobs were running smoothly even after renaming the server.
Any help on this would be appreciated. I have tried google and am not yet able to find a solution.
Sudarshan.