Hi Suresh,
Thanks for a great suggestion, I'll surely try this... however... in case I found out that it is still running... odd thing is we left it overnight and its still running until morning... and its a newly installed OS... os usage is less than 20GB... we did a successful backup on Win7 and Win2003 in less than 20 minutes, only on Windows 2008 R2 that we're having issues, we even encountered error at first, which was resolved by editing the disk.UUID as per vmware KB and now the only problem is that it halts at 92%. Datastore for the VDP has 3TB available.