ITunes could not restore the iPhone because the backup could not be saved on this computer

Dears,
Today I planned to update my iPhone 4 to iOS7.
After update while my iPhone was connected to the computer, it didn't work and iTunes asked me to restore my iPhone before I can use it.
Well, I had to click Ok and iPhone was restore to factory settings and removed everything.
Now I went to iTunes again to restore the entire backup I created eariler for the photos, videos, contacts and everything 20+GB.
The iTunes starts the restore process but stoppes in the middle of the progress and gives the error:
iTunes could not restore the iPhone"My iPhone Name" because the backup could not be saved on this computer.
I tried 3 times but no avail.
If my C: drive is almost full and it might be the issue, can I move my backup files to another location D: drive for example and restore them to my iPhone?
Please help me.
Thank you.

I get the same issue w/ an iPad that I just updated to the latest iOS.  I made the backup before upgrading the iOS.  Now when i try to restore that backup made 35 min or so ago, I get this error.  Help!

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