I've seen this error when attempting to safely remove a device while I'm connected via Remote Desktop (er, Linux's rdesktop). The safely remove taskbar icon doesn't appear, and I get the above popup when I navigate to the device in the Explorer and try to remove with the right-click menu option. I don't suppose anyone knows how to get the taskbar icon to appear when I'm logged in "remotely" (both machines are in the same cubicle...)

I have the same problem when trying to remove a USB hard drive. I have tracked it down to a Vista program running in the background - wmpnetwk.exe

This is the Windows Media Network Sharing Service.

Open task manager, show processes for all users, and down the bottom, shut down wmpnetwk.exe

Then use "safely remove" quickly, as wmpnetwk.exe will self startup after a few seconds.

Cant see a permanent fix at Microsoft, so it obviously doesn't happen as far as they are concerned - really????

I’ve noticed that this warning will happen consistently under certain conditions, though I’m not entirely certain which ones, yet.
Either way, another consistency I’ve noticed is that if there really isn’t anything open, the first attempt to eject usually fails, and second attempt to eject almost always succeeds.