Ed,
I created a FLL for SHFileOperation. Though it generally succeeds, rarely it returns 'Cannot read from device' (1026?) error under XP (and .NET Release version installed). Retrying succeeds if done with a short delay. In many trials I couldn't make it to work consistently. Directly using CopyFile,MoveFile etc API it never fails (provided same access rights etc). It was working w/o failure under w2k and w9x (no .NET).
I'll try to send the source to you hoping you can catch something I missed :)
Best regards
Cetin