Finally found the cause of the problem - but no solution :-(
My ASUS P4P800 Deluxe motherboard's BIOS does not "see" drives 1Tb (or larger). Even if you plug the Buffalo drive in after the Windows boot-up and use it then, it will eventually crash with a BSOD in the middle of your backup - so that solution is not acceptable.
There are a multitude of messages about this problem on the ASUS board forum - but so far ASUS has not fixed the BIOS - not just for older boards like my P4P800 but also newer boards...
My much older ASUS (10 years) works with the 1TB Buffalo drive - go figure...
Message Edited by cvj on 01-18-2009 01:40 PM