The article 909265 states that backup may fail when performing a system state backup on a domain controller that is running Windows Server 2003 with Service Pack 1. I had the exact same issue today when I tried to do the system state backup on one of our domain controllers. My situation falls into scenario 3, the database is stored on C and the log files are on D, and the method 2 that states below fixed my problem.
Method 2
If a domain controller configuration corresponds to scenarios 3 and 4, select any file on the volume that includes Active Directory database files in the right pane of NTBACKUP. This file can be a dummy file. In this configuration, this volume is backed up by NTBACKUP.