I'm getting this error with version 4.0 and 4.1.2 (I updated Veeam to see if it would help).
I'm using an (paid) ESXi 4.0 as a host (without vSphere server).
I have more (different) tasks running on the same (esxi) server, they are still running fine and making backups as they should.
It appears that for this particular server, VeeAm can't make a snapshot anymore.
Also, I have 2 VM is the backup JOB that's failing. On some days, one VM is backup up (success) and the other one states (failed).
On other days, it only shows the failed one.
Screenshot:

Haven't yet tried anything to resolve this, because I don't want to risk trying anything that might make it worse.
There is currently no snapshot present on the involved VM.
Any help or suggestions would be greatly appreciated.
(I am posting here because I don't really believe this to be a Veeam issue, but rather a VMWare issue but I'm not sure)
**VeeAm shows this:**
0 of 0 files processed
Total VM size: 145,00 GB
Processed size: 0,00 KB
Processing rate: 0 KB/s
Backup mode: NBD without changed block tracking
Start time: 3-8-2010 3:47:23
End time: 3-8-2010 3:53:26
Duration: 0:06:03
Enabling changed block tracking...
Changed block tracking cannot be enabled: virtual hardware version 7 or later required.
Creating snapshot
CreateSnapshot failed, vmRef "48", timeout "1800000", snName "VEEAM BACKUP TEMPORARY SNAPSHOT", snDescription "Please do not delete this snapshot. It is being used by Veeam Backup.", memory "False", quiesce "False"
The operation is not allowed in the current state.
*************Sometimes it also shows this:********************
0 of 0 files processed
Total VM size: 145,00 GB
Processed size: 0,00 KB
Processing rate: 0 KB/s
Backup mode: NBD without changed block tracking
Start time: 11-8-2010 3:22:06
End time: 11-8-2010 3:23:11
Duration: 0:01:04
Enabling changed block tracking...
Changed block tracking cannot be enabled: virtual hardware version 7 or later required.
Creating snapshot
CreateSnapshot failed, vmRef "48", timeout "1800000", snName "VEEAM BACKUP TEMPORARY SNAPSHOT", snDescription "Please do not delete this snapshot. It is being used by Veeam Backup.", memory "False", quiesce "False"
Failed to login to "172.18.0.31" by SOAP, port 443, user "root", proxy srv: port:0
The remote server returned an error: (503) Server Unavailable.