I'm not exactly sure when this started; might have been 1438. What I see happening is that when I execute a synch operation every Delete action is marked "Handle is invalid", although the deletes actually get carried out correctly.
Do you have any special file paths? I could not reproduce it. Could I ask you to try deleting few test files in c:\test folder - would it fail with same results? Do you have any anti-virus monitoring software?
Sorry to just now be getting back to this; I've been busy with my "real work" I can repro this reliably; the thing I neglected to mention is the target path is a mapped drive (Z) mapped to my laptop over on the shelf, also running XP Pro.
I created a folder structure on the laptop Test\TestA and Test\TestB and put two files in each sub-folder, then created the same folders here on my desktop system with no files in them. Then I synchronized from desktop to laptop using Backup. I got "Handle is invalid" for each of the four files but they were deleted correctly.
I repeated the test with the same folder structure but now as D:\Test1 and D:\Test2. I got the same "handle is invalid" upon deletion of the files in the Test2 tree that were not found in the Test1 tree.
Two of us also reported the same issue with build 1432. Posted in sync bugs.
I have the same problem even in a clean install on virtualPC.
If we had access to some previous builds, we could identify where it started to display this error.