99jon, thanks for the reply.
I deleted two other slide show programs by right clicking on their thumbnails then clicking on "Delete from Catalog" and doing the optimize and repair buttons and all went fine. These files were known to be on the C drive, however, I cannot delete the file on the phantom F drive with the same procedure.
I noticed the slide programs have a file extension of .psess and did a Windows searched of my computer for the file in question and found it as a hidden file and deleted it via Windows. The file name is now in the recycle bin however, the thumbnail still appears in the PS catalog and it still works.
I am doing all this in preparation to moving from my XP machine to a new Windows 8 laptop. I also bought PS Elements 11 to install on the laptop. I am wondering if installing PS 11 on the old XP would help with my problem. Or would it cause a problem that could result in the loss of all my photos? I sure would like a backup before starting to move to the Win 8 laptop.
UPDATE: Tried a full backup to a new external HD and it failed at 75% just as before.
What is the source of backup (CD/DVD/External hard disk)?
The .psess file is located inside 'Projects' folder in your catalog folder (location of catalog folder can be determined from Help->System Info). You can check for the permission of this file and make sure that all users has read-write permission for it.
Now right click 'PhotoshopElementsOrganizer.exe' (located in: C:\Program Files (x86)\Adobe\Elements 11 Organizer) and select 'Run as admin'. Now try deleting file.