Application Error - Event ID: 1000

Whenver I run a backup using the following code the backup is successful, but an Application Error is recorded in the Application Log and no e-mail is sent. I made sure that the user running the script had access to the entire SQLBackup registry key, and that didn't fix the problem.

set @databasename = 'foo'

set @backuppath = '\\snap1\Backups\Databases\'  
set @datestamp = left(replace(replace(replace(convert(varchar(30), getdate(), 120), '-', ''), ' ', ''), ':', ''), 12)  
set @filename = @backuppath + @databasename + '_db_(diff)_' + @datestamp + '.sqb'  
set @backupstring = '-SQL "BACKUP DATABASE [' + @databasename + '] TO DISK = ''' + @filename + ''' WITH NAME = ''Database (' + @databasename + ') Diff'', DIFFERENTIAL, INIT, PASSWORD = ''<ENCRYPTEDPASSWORD>************</ENCRYPTEDPASSWORD>'', MAILTO = ''foo@bar.com'', COMPRESSION = 1" -E'  
  
exec master..sqlbackup @backupstring  

There are two entries recorded in the Application Log, the first is of Type "Information" and the description is as follows.

18270 :
Database differential changes backed up: Database: foo, creation date(time): 2005/12/05(15:59:52), pages dumped: 104, first LSN: 1369:405:1, last LSN: 1369:407:1, full backup LSN: 1369:392:3, number of dump devices: 1, device information: (FILE=1, TYPE=VIRTUAL_DEVICE: {'SQLBACKUP_201300157'}).

The second entry is 4 seconds later and is of Type "Error" with the Event ID of 1000. The description is as follows.

Faulting application sqlbackupc.exe, version 3.2.0.1, faulting module kernel32.dll, version 5.2.3790.1830, fault address 0x00015dea.

Thanks for your help!
Brian Craig