Alright, I am not sure if this is still open but maybe someone is still having a problem. I had the same error until I turned my Account Control to OFF. You can do that by typing msconfig in your start menu search followed by clicking the tools tab (thats for vista, for xp you have to run mscofig). Go down until you see Disable UAC (user account control). Disable it, you will get a success message, and then restart your computer (I know you wont want to but it wont work if you don't). Once thats off and reset everything will be fine and you can stop screaming that everything is formatted correctly. Let me know if this helps
