That would definately cause the error message. -the file missing. Although, the file may be hidden(this would not cause the error in System Mechanic), you could follow the steps in the link below to unhide your files. You will have to re-hide the files after you have done your search.
Instructions on how to do this can be found here:
How to see hidden files in WindowsThis will confirm that the file is missing. Not sure if that makes a difference since you mentioned that is a function that you don't use. Personally, I don't really care about this feature either. Registry Mechanic would be more likely to delete the registry entry, not the file... Not 100% sure since I do not use this product, I would have to do more research to look at all of its features, including your backup question....Right now, I would not proceed with that. You could probably expand the file from the Windows 2000 CD if you really needed the file.