I too am having this probem.
SYNC: 10/07/2010 21:26:00:064: *** Error: Unknown error. The specified network name is no longer available. (Exception from HRESULT: 0x80070040)
It is working for nearly all files, but failing on one. The problem file is a 5 GB .pst file (outlook data).
Using SyncToy 2.1 to synchronize files on various workstations to a backup location. There are source workstations, a destination server, and the server running SyncToy.
The paths are established on the server running SyncToy. I have been able to successfully use Windows Explorer to copy this file from the source workstation to the destination server.
SyncToy has apparently managed to copy the data of the file. At the destination location appears the file: FSP0BE134B2810148449FE1A63CE65743B1.tmp. It is the exact size as the .pst file it fails to complete.
The destination location is a Windows 2000 server file share. The destination folder has the compression attribute.