CobianSoft

Is this an FTP backup or a local one? For a large ammount of small files, 7z compression could be a good solution.

The folder is created but it is empty.

You want to activate the Mirror mode for your task. Be aware that a mirror is NOT a backup but if you don't care for the safity of your files, just check the Mirror option.

If you change a file manually, does the archive attribute get set?

Perhaps the access denied refers to the destination? What is the destination you are using?

Should work as an application , not as a service

Googling this problems , this seems to be quite a common issue for many programs. I think it has something to do with UTC time and how Explorer displays the dates but I'm not quite sure.

That is often the case.

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