So I have it down to this... I have my own Windows network credentials loaded in ##xp_cmdshell_proxy_account##.  I have granted execute on cmd_shell to my network account.  I then login as a standard SQL Server login and try executing the following:

DECLARE @cmd varchar(1000)
SET @cmd = 'copy \\server\c$\folder\file.txt \\sameserver\newfolder\'
PRINT @cmd
EXEC xp_cmdshell @cmd

My expectation is that when the exec runs it will use the ##xp_cmdshell_proxy_account## which has my network credentials stored.  My network credentials are listed as an admin on the server - so there should be no problem and I granted execute permission on xp_cmdshell to my network user account.  But, when I simply run the command in Management Studio logged in as the SQL Server login, I get the error:

The EXECUTE permission was denied on the object 'xp_cmdshell', database 'mssqlsystemresource', schema 'sys'.

The overall goal is for a .net application to kick off a stored procedure which writes data from the database to a file and then copies the file to a web server.  The stored procedure then fires a web service which sends the user a link to the file.  I had this all working on an older SQL Server machine but now cannot replicate it on our new machine.  I seem to be stuck and pulling my hair out.  UGH!  

Thanks for the help!!!