Due to Quicken's programming you'll see that. You know what Quicken will tell you so the cheap exit is to stick with FAT32 1GB sticks.
I am using Windows XP Pro SP2. I have Quicken 2000 which I have regularly backed up to 2 separate 1GB Flash drives with no problems. I was recently given a 4GB flash drive which I then used instead of one of the 1GB drives. I had already copied all the existing files from one of the smaller flash drives to the 4GB drive so the file names are on the drive. However, the first time I went to back up the Quicken files directly to this drive (which has over 3GB of free disk space) I got the message "Your backup disk is out of space". The disk is formatted as NTFS and I have no problems saving files to this drive from other applications e.g. Excel. Is the size of the flash drive an issue?