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When updating any software product, as well as manually trying to replace .exe files, it says that access is denied to the file and in fact the System process is holding a handle to the file when I check it with Process Explorer.

This must be a driver or something that is malfunctioning was my first though, but now I wonder how I figure out which driver / program is doing this and why it is so. Unlocker doesn't seem to be working for me, unless someone can tell me how to use it properly other than making it appear a magical wand in the notification area....

Unlocker update:

This is what Unlocker puts in my event log:

The description for Event ID 1060 from source Application Popup cannot be found. Either the component that raises this event is not installed on your local computer or the installation is corrupted. You can install or repair the component on the local computer.

The following information was included with the event:

\??\C:\Program Files (x86)\Unlocker\UnlockerDriver5.sys

Upon searching event 1060 I get:

<file name> has been blocked from loading due to incompatibility with this system.

This also happens with the 64 bit version of Unlocker.

Process Monitor & Windows Defender update:

Process Monitor mentions Access Denied, the permissions window on the item is accessible.

It's not Windows Defender, disabled both services and it still happens.

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When in doubt, restart your PC! ;) – Mayank Apr 8 '12 at 14:54
Malware is known to block executables. – Moab Apr 8 '12 at 14:56
It probably won't help, but Unlocker should appear as an option on the right click context menu for files. I'm not sure what the notification icon is for, perhaps a 'fast load'. – Bob Apr 8 '12 at 15:50
Make sure you have the correct version, there's a 64-bit version. Also, my Unlocker option is on the 'root' context menu, not the Send To submenu. You may wish to try Process Monitor, see if you can narrow down what is locking the files, though I guess it would just show the System process... worth a shot. – Bob Apr 8 '12 at 17:32
I can't believe I missed this (basic questions incoming): Did it only start recently, were any recent changes, especially relating to new software and/or driver updates, if it is recent does a System Restore fix the issue? – Bob Apr 8 '12 at 17:46
up vote 1 down vote accepted

This was because I had disabled Application Experience service. Enabling it fixes the problem!

Figured it out by reading various Microsoft forum messages, through this Stack Overflow question

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