When you attempt to format the new partition, or assign a drive letter, you receive one or both of the following:

Logical Disk Manager: The path cannot be used for creating a drive path likely because the folder does not exist or is already a drive path to some other volume.

Logical Disk Manager: The format did not complete successfully.

This behavior is caused by Remote Storage, which opens an exclusive handle to the partition when it receives notification that the new partition has been created.

If simply trying again doesn't resolve the problem, use Administrative Tools to open Services. Right-click Remote Storage Server and press Stop.

When you finish formatting, or assigning a drive letter, Right-click Remote Storage Server and press Start.

NOTE: See How to use Remote Storage in Windows Server 2003.