Same prob here, too.
Running II6 and SQL2K. I have the Network Service account set for full rights on root, sub-folders and all files contained in each. I have tested the connection to the SQL Server by renaming the server ID and received a different set of error statements, so this has got to be independent of the database connection.
I have masked out part of my full physical path for security purposes. I have changed the name and user ID's used to connect to the SQL Server for security, too. You should be able to get the point I'm making though. 
Object reference not set to an instance of an object.Could not find a part of the path 'C:\Inetpub\******\dspwest.com\httpdocs\Config\Backup_20062211314\web_.config'.Access to the path 'C:\Inetpub\******\dspwest.com\httpdocs\web.config' is denied.Access to the path 'C:\Inetpub\******\dspwest.com\httpdocs\SiteUrls.config' is denied.
DotNetNuke has extensive file upload capabilities for content, modules, and skins. These features require custom security settings so that the application is able to create and remove files in your website.
Using Windows Explorer, browse to the root folder of the website ( C:\DotNetNuke by default ). Right-click the folder and select Sharing and Security from the popup menu ( please note that if you are using Windows XP you may need to Enable Simple File Sharing before these options are displayed ). Select the Security tab. Add the appropriate User Account and set the Permissions.
If using Windows 2000 - IIS5
- the {Server}\ASPNET User Account must have Read, Write, and Change Control of the virtual root of your website
If using Windows 2003 - IIS6
- the NT AUTHORITY\NETWORK SERVICE User Account must have Read, Write, and Change Control of the virtual root of your website
<configuration xmlns="http://schemas.microsoft.com/.NetConfiguration/v2.0">
<!-- register local configuration handlers -->
<configSections>
<sectionGroup name="dotnetnuke">
<!-- the requirePermission attribute will cause a syntax warning - please ignore - it is required for Medium Trust support-->
<section name="data" requirePermission="false" type="DotNetNuke.Framework.Providers.ProviderConfigurationHandler, DotNetNuke" />
<section name="logging" requirePermission="false" type="DotNetNuke.Framework.Providers.ProviderConfigurationHandler, DotNetNuke" />
<section name="scheduling" requirePermission="false" type="DotNetNuke.Framework.Providers.ProviderConfigurationHandler, DotNetNuke" />
<section name="htmlEditor" requirePermission="false" type="DotNetNuke.Framework.Providers.ProviderConfigurationHandler, DotNetNuke" />
<section name="navigationControl" requirePermission="false" type="DotNetNuke.Framework.Providers.ProviderConfigurationHandler, DotNetNuke" />
<section name="searchIndex" requirePermission="false" type="DotNetNuke.Framework.Providers.ProviderConfigurationHandler, DotNetNuke" />
<section name="searchDataStore" requirePermission="false" type="DotNetNuke.Framework.Providers.ProviderConfigurationHandler, DotNetNuke" />
<section name="friendlyUrl" requirePermission="false" type="DotNetNuke.Framework.Providers.ProviderConfigurationHandler, DotNetNuke" />
<section name="caching" requirePermission="false" type="DotNetNuke.Framework.Providers.ProviderConfigurationHandler, DotNetNuke" />
<section name="authentication" requirePermission="false" type="DotNetNuke.Framework.Providers.ProviderConfigurationHandler, DotNetNuke" />
</sectionGroup>
</configSections>
<connectionStrings>
<remove name="LocalSqlServer" />
<add name="SiteSqlServer" connectionString="Server=SQLSERVER;Database=PWS;uid=sqluser;pwd=sqluser;" providerName="System.Data.SqlClient" />
</connectionStrings>
<appSettings>
<!-- Connection String for SQL Server 2000/2005 - kept for backwards compatability - legacy modules -->
<add key="SiteSqlServer" value="Server=SQL1;Database=PWS;uid=sqluser;pwd=sqluser;" />
<add key="InstallTemplate" value="DotNetNuke.install.config" />
<!-- Alternative Install Templates (included in package)
<add key="InstallTemplate" value="Club.install.config" />
<add key="InstallTemplate" value="Personal.install.config" />
<add key="InstallTemplate" value="SmallBusiness.install.config" />
-->
<add key="AutoUpgrade" value="true" />
<add key="InstallMemberRole" value="true" />
<add key="ShowMissingKeys" value="false" />
<add key="EnableWebFarmSupport" value="false" />
<add key="EnableCachePersistence" value="false" />
</appSettings>
<system.codedom>
<compilers>
<compiler language="vb" type="Microsoft.VisualBasic.VBCodeProvider, System, Version=2.0.0.0, Culture=neutral, PublicKeyToken=B77A5C561934E089" extension=".VB" />
</compilers>
</system.codedom>
<system.web>
<machineKey validationKey="F9D1A2D3E1D3E2F7B3D9F90FF3965ABDAC304902" decryptionKey="F9D1A2D3E1D3E2F7B3D9F90FF3965ABDAC304902F8D923AC" decryption="3DES" validation="SHA1" />
<!-- HttpModules for Common Functionality -->
<httpModules>
<!-- add name="Authentication" type="DotNetNuke.HttpModules.AuthenticationModule, DotNetNuke.HttpModules.Authentication" / -->
<add name="UrlRewrite" type="DotNetNuke.HttpModules.UrlRewriteModule, DotNetNuke.HttpModules.UrlRewrite" />
<add name="Exception" type="DotNetNuke.HttpModules.ExceptionModule, DotNetNuke.HttpModules.Exception" />
<add name="UsersOnline" type="DotNetNuke.HttpModules.UsersOnlineModule, DotNetNuke.HttpModules.UsersOnline" />
<add name="DNNMembership" type="DotNetNuke.HttpModules.DNNMembershipModule, DotNetNuke.HttpModules.DNNMembership" />
<add name="Personalization" type="DotNetNuke.HttpModules.PersonalizationModule, DotNetNuke.HttpModules.Personalization" />
</httpModules>
<!-- This is for FTB 3.0 support -->
<httpHandlers>
<add verb="GET" path="FtbWebResource.axd" type="FreeTextBoxControls.AssemblyResourceHandler, FreeTextBox" />
</httpHandlers>
<!-- set code access security trust level - this is generally set in the machine.config
<trust level="Medium" originUrl="http://localhost/.*" />
-->
<!-- set debugmode to false for running application -->
<compilation debug="false" strict="false">
<buildProviders>
<remove extension=".resx" />
<remove extension=".resources" />
</buildProviders>
<assemblies>
<add assembly="Microsoft.VisualBasic, Version=8.0.0.0, Culture=neutral, PublicKeyToken=B03F5F7F11D50A3A" />
<add assembly="System.DirectoryServices, Version=2.0.0.0, Culture=neutral, PublicKeyToken=B03F5F7F11D50A3A" />
<add assembly="System.Design, Version=2.0.0.0, Culture=neutral, PublicKeyToken=B03F5F7F11D50A3A" />
<add assembly="System.Management, Version=2.0.0.0, Culture=neutral, PublicKeyToken=B03F5F7F11D50A3A" />
</assemblies>
<!-- register your app_code subfolders to generate granular assemblies during compilation
<codeSubDirectories>
<add directoryName="sub-directory name"/>
</codeSubDirectories>
-->
</compilation>
<!-- permits errors to be displayed for remote clients -->
<customErrors mode="RemoteOnly" />
<!-- Forms or Windows authentication -->
<authentication mode="Forms">
<forms name=".DOTNETNUKE" protection="All" timeout="60" />
</authentication>
<!--
<identity impersonate="true"/>
<authentication mode="Windows">
</authentication>
-->
<!-- allow large file uploads -->
<httpRuntime useFullyQualifiedRedirectUrl="true" maxRequestLength="8192" requestLengthDiskThreshold="8192" />
<httpCookies httpOnlyCookies="true" requireSSL="false" domain="" />
<!-- GLOBALIZATION
This section sets the globalization settings of the application.
Utf-8 is not supported on Netscape 4.x
If you need netscape compatiblity leave iso-8859-1.
UTF-8 is recommended for complex languages
-->
<globalization culture="en-US" uiCulture="en" requestEncoding="UTF-8" responseEncoding="UTF-8" fileEncoding="UTF-8" />
<!--<globalization culture="en-US" uiCulture="en" fileEncoding="iso-8859-1" requestEncoding="iso-8859-1" responseEncoding="iso-8859-1"/>-->
<!-- page level options -->
<pages validateRequest="false" enableViewStateMac="true" enableEventValidation="false">
<namespaces>
<add namespace="System.ComponentModel" />
<add namespace="System.Data" />
<add namespace="System.Data.SqlClient" />
<add namespace="System.Drawing" />
<add namespace="Microsoft.VisualBasic" />
<add namespace="System.Globalization" />
<add namespace="DotNetNuke.Services.Localization" />
<add namespace="DotNetNuke.Entities.Users" />
<add namespace="DotNetNuke" />
<add namespace="DotNetNuke.Common" />
<add namespace="DotNetNuke.Data" />
<add namespace="DotNetNuke.Framework" />
<add namespace="DotNetNuke.Modules" />
<add namespace="DotNetNuke.Security" />
<add namespace="DotNetNuke.Services" />
<add namespace="DotNetNuke.UI" />
<add namespace="DotNetNuke.Entities.Portals" />
<add namespace="DotNetNuke.Common.Utilities" />
<add namespace="DotNetNuke.Services.Exceptions" />
<add namespace="DotNetNuke.Entities.Tabs" />
</namespaces>
</pages>
<xhtmlConformance mode="Legacy" />
<!-- ASP.NET 2 Membership/Profile/Role and AnonymousAuthentication Providers -->
<!-- anonymousIdentification configuration:
enabled="[true|false]" Feature is enabled?
cookieName=".ASPXANONYMOUS" Cookie Name
cookieTimeout="100000" Cookie Timeout in minutes
cookiePath="/" Cookie Path
cookieRequireSSL="[true|false]" Set Secure bit in Cookie
cookieSlidingExpiration="[true|false]" Reissue expiring cookies?
cookieProtection="[None|Validation|Encryption|All]" How to protect cookies from being read/tampered
domain="[domain]" Enables output of the "domain" cookie attribute set to the specified value
-->
<anonymousIdentification enabled="true" cookieName=".ASPXANONYMOUS" cookieTimeout="100000" cookiePath="/" cookieRequireSSL="false" cookieSlidingExpiration="true" cookieProtection="None" domain="" />
<membership defaultProvider="DNNSQLMembershipProvider" userIsOnlineTimeWindow="15">
<providers>
<clear />
<!-- Configuration for DNNSQLMembershipProvider:
connectionStringName="string" Name corresponding to the entry in <connectionStrings> section where the connection string for the provider is specified
passwordAttemptThreshold="int" The number of failed password attempts, or failed password answer attempts that are allowed before locking out a user?s account
passwordAttemptWindow="int" The time window, in minutes, during which failed password attempts and failed password answer attempts are tracked
enablePasswordRetrieval="[true|false]" Should the provider support password retrievals
enablePasswordReset="[true|false]" Should the provider support password resets
requiresQuestionAndAnswer="[true|false]" Should the provider require Q & A
minRequiredPasswordLength="int" The minimum password length
minRequiredNonalphanumericCharacters="int" The minimum number of non-alphanumeric characters
applicationName="string" Optional string to identity the application: defaults to Application Metabase path
requiresUniqueEmail="[true|false]" Should the provider require a unique email to be specified
passwordFormat="[Clear|Hashed|Encrypted]" Storage format for the password: Hashed (SHA1), Clear or Encrypted (Triple-DES)
description="string" Description of what the provider does
-->
<add name="DNNSQLMembershipProvider" type="DotNetNuke.Security.Membership.DNNSQLMembershipProvider, DotNetNuke.Provider.SQLMembershipProvider" connectionStringName="SiteSqlServer" enablePasswordRetrieval="true" enablePasswordReset="true" requiresQuestionAndAnswer="false" minRequiredPasswordLength="4" minRequiredNonalphanumericCharacters="0" requiresUniqueEmail="false" passwordFormat="Encrypted" applicationName="/" description="Stores and retrieves membership data from the local Microsoft SQL Server database" />
</providers>
</membership>
<!-- Configuration for roleManager:
enabled="[true|false]" Feature is enabled?
cacheRolesInCookie="[true|false]" Cache roles in cookie?
cookieName=".ASPXROLES" Cookie Name
createPersistentCookie="[true|false]" Creates a persistent cookie or session cookie?
cookieTimeout="30" Cookie Timeout
cookiePath="/" Cookie Path
cookieRequireSSL="[true|false]" Set Secure bit in Cookie
cookieSlidingExpiration="[true|false]" Reissue expiring cookies?
cookieProtection="[None|Validation|Encryption|All]" How to protect cookies from being read/tampered
defaultProvider="string" Name of provider to use by default
domain="[domain]" Enables output of the "domain" cookie attribute set to the specified value
maxCachedResults="int" Maximum number of roles to cache in cookie
-->
<roleManager enabled="true" defaultProvider="DNNSQLRoleProvider" cacheRolesInCookie="true" cookieName=".ASPXROLES" cookieTimeout="30" cookiePath="/" cookieRequireSSL="false" cookieSlidingExpiration="true" createPersistentCookie="false" cookieProtection="All">
<providers>
<clear />
<!-- Configuration for DNNSQLRoleProvider:
connectionStringName="string" Name corresponding to the entry in <connectionStrings> section where the connection string for the provider is specified
description="string" Description of what the provider does
commandTimeout="int" Command timeout value for SQL command
-->
<add name="DNNSQLRoleProvider" type="DotNetNuke.Security.Role.DNNSQLRoleProvider, DotNetNuke.Provider.SQLRoleProvider" connectionStringName="SiteSqlServer" applicationName="/" description="Stores and retrieves roles data from the local Microsoft SQL Server database" />
</providers>
</roleManager>
<!-- Configuration for profile:
enabled="[true|false]" Feature is enabled?
automaticSaveEnabled="[true|false]" Enable automatic save of profile
inherits="type-name" Class from which the profile type inherits from. This type must inherit from ProfileBase type.
-->
<profile enabled="true" defaultProvider="DNNSQLProfileProvider">
<providers>
<clear />
<!-- Configuration for DNNSQLProfileProvider:
connectionStringName="string" Name corresponding to the entry in <connectionStrings> section where the connection string for the provider is specified
description="string" Description of what the provider does
-->
<add name="DNNSQLProfileProvider" type="DotNetNuke.Users.Profile.DNNSQLProfileProvider, DotNetNuke.Provider.SQLProfileProvider" connectionStringName="SiteSqlServer" applicationName="/" description="Stores and retrieves profile data from the local Microsoft SQL Server database" />
</providers>
<!-- Properites for DNNSQLProfileProvider:
<properties> Optional element. List of properties in the Profile system
<add Add a property
name="string" Name of the property
type="string" Optional. Type of the property. Default: string.
readOnly="[true|false]" Optional. Is Value read-only. Default: false.
defaultValue="string" Optional. Default Value. Default: Empty string.
allowAnonymous="[true|false]" Optional. Allow storing values for anonymous users. Default: false.
serializeAs=["String|Xml|Binary|ProviderSpecific"] Optional. How to serialize the type. Default: ProviderSpecific.
/>
</properties>
-->
<properties>
<add name="FirstName" type="string" allowAnonymous="true" />
<add name="LastName" type="string" allowAnonymous="true" />
<add name="Unit" type="string" allowAnonymous="true" />
<add name="Street" type="string" allowAnonymous="true" />
<add name="City" type="string" allowAnonymous="true" />
<add name="Region" type="string" allowAnonymous="true" />
<add name="PostalCode" type="string" allowAnonymous="true" />
<add name="Country" type="string" allowAnonymous="true" />
<add name="Telephone" type="string" allowAnonymous="true" />
<add name="Fax" type="string" allowAnonymous="true" />
<add name="Cell" type="string" allowAnonymous="true" />
<add name="Website" type="string" allowAnonymous="true" />
<add name="IM" type="string" allowAnonymous="true" />
<add name="TimeZone" type="integer" allowAnonymous="true" />
<add name="PreferredLocale" type="string" allowAnonymous="true" />
</properties>
</profile>
</system.web>
<dotnetnuke>
<htmlEditor defaultProvider="Ftb3HtmlEditorProvider">
<providers>
<clear />
<!--
FTB options:
============
toolbarStyle="Office2003|OfficeXP|Office2000|OfficeMac" Sets the default FTB Toolbar style
enableProFeatures="[true|false]" Pro features require a license from FreeTextBox
or you may test them with localhost only
spellCheck="[{none}|IeSpellCheck|NetSpell]" IeSpellCheck is free for non-commercial use only
NetSpell requires some integration work
-->
<add name="Ftb3HtmlEditorProvider" type="DotNetNuke.HtmlEditor.Ftb3HtmlEditorProvider, DotNetNuke.Ftb3HtmlEditorProvider" providerPath="~\Providers\HtmlEditorProviders\Ftb3HtmlEditorProvider\" toolbarStyle="Office2003" enableProFeatures="false" spellCheck="" />
</providers>
</htmlEditor>
<navigationControl defaultProvider="SolpartMenuNavigationProvider">
<providers>
<clear />
<add name="SolpartMenuNavigationProvider" type="DotNetNuke.NavigationControl.SolpartMenuNavigationProvider, DotNetNuke.SolpartMenuNavigationProvider" providerPath="~\Providers\NavigationProviders\SolpartMenuNavigationProvider\" />
<add name="DNNMenuNavigationProvider" type="DotNetNuke.NavigationControl.DNNMenuNavigationProvider, DotNetNuke.DNNMenuNavigationProvider" providerPath="~\Providers\NavigationProviders\DNNMenuNavigationProvider\" />
<add name="DNNTreeNavigationProvider" type="DotNetNuke.NavigationControl.DNNTreeNavigationProvider, DotNetNuke.DNNTreeNavigationProvider" providerPath="~\Providers\NavigationProviders\DNNTreeNavigationProvider\" />
<add name="DNNDropDownNavigationProvider" type="DotNetNuke.NavigationControl.DNNDropDownNavigationProvider, DotNetNuke.DNNDropDownNavigationProvider" providerPath="~\Providers\NavigationProviders\DNNDropDownNavigationProvider\" />
</providers>
</navigationControl>
<searchIndex defaultProvider="ModuleIndexProvider">
<providers>
<clear />
<add name="ModuleIndexProvider" type="DotNetNuke.Services.Search.ModuleIndexer, DotNetNuke.Search.Index" providerPath="~\Providers\SearchProviders\ModuleIndexer\" />
</providers>
</searchIndex>
<searchDataStore defaultProvider="SearchDataStoreProvider">
<providers>
<clear />
<add name="SearchDataStoreProvider" type="DotNetNuke.Services.Search.SearchDataStore, DotNetNuke.Search.DataStore" providerPath="~\Providers\SearchProviders\SearchDataStore\" />
</providers>
</searchDataStore>
<data defaultProvider="SqlDataProvider">
<providers>
<clear />
<add name="SqlDataProvider" type="DotNetNuke.Data.SqlDataProvider, DotNetNuke.SqlDataProvider" connectionStringName="SiteSqlServer" upgradeConnectionString="" providerPath="~\Providers\DataProviders\SqlDataProvider\" objectQualifier="" templateFile="DotNetNuke_template.mdf" databaseOwner="dbo" />
</providers>
</data>
<logging defaultProvider="DBLoggingProvider">
<providers>
<clear />
<add name="XMLLoggingProvider" type="DotNetNuke.Services.Log.EventLog.XMLLoggingProvider, DotNetNuke.XMLLoggingProvider" configfilename="LogConfig.xml.resources" providerPath="~\Providers\LoggingProviders\XMLLoggingProvider\" />
<add name="DBLoggingProvider" type="DotNetNuke.Services.Log.EventLog.DBLoggingProvider.DBLoggingProvider, DotNetNuke.Provider.DBLoggingProvider" providerPath="~\Providers\LoggingProviders\Provider.DBLoggingProvider\" />
</providers>
</logging>
<scheduling defaultProvider="DNNScheduler">
<providers>
<clear />
<add name="DNNScheduler" type="DotNetNuke.Services.Scheduling.DNNScheduling.DNNScheduler, DotNetNuke.DNNScheduler" providerPath="~\Providers\SchedulingProviders\DNNScheduler\" debug="false" maxThreads="1" />
</providers>
</scheduling>
<friendlyUrl defaultProvider="DNNFriendlyUrl">
<providers>
<clear />
<add name="DNNFriendlyUrl" type="DotNetNuke.Services.Url.FriendlyUrl.DNNFriendlyUrlProvider, DotNetNuke.HttpModules.UrlRewrite" includePageName="true" regexMatch="[^a-zA-Z0-9 _-]" />
</providers>
</friendlyUrl>
<caching defaultProvider="FileBasedCachingProvider">
<providers>
<clear />
<add name="FileBasedCachingProvider" type="DotNetNuke.Services.Cache.FileBasedCachingProvider.FBCachingProvider, DotNetNuke.Caching.FileBasedCachingProvider" providerPath="~\Providers\CachingProviders\FileBasedCachingProvider\" />
<add name="BroadcastPollingCachingProvider" type="DotNetNuke.Services.Cache.BroadcastPollingCachingProvider.BPCachingProvider, DotNetNuke.Caching.BroadcastPollingCachingProvider" providerPath="~\Providers\CachingProviders\BroadcastPollingCachingProvider\" />
</providers>
</caching>
<authentication defaultProvider="ADSIAuthenticationProvider">
<providers>
<clear />
<add name="ADSIAuthenticationProvider" type="DotNetNuke.Security.Authentication.ADSIProvider, DotNetNuke.Authentication.ADSIProvider" providerPath="~\Providers\AuthenticationProviders\ADSIProvider\" />
</providers>
</authentication>
</dotnetnuke>
</configuration>