It shows you have version 4.06a installed, and we have never had this problem reported with that version. Please updated to version 4.08 to see if it does the same thing, and as stated above, try version 3.400 to see if it also does this.
Here is how to run Version 3.400.
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NOTE: Hoster 3.400 was also installed with Hoster 4.0. This is located at C:\Program Files\Micro Technology Unlimited\Hoster\Hoster34.exe - This version is the same as Hoster 3.321 which was the last stable version before releasing 4.0. If you have any problems you can run this version if you need to, without having to uninstall version 4.0. It was built with the same security as a backup if you experience any problems. You can also make a short cut to this if you need.
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You can download version 4.08 from here
http://www.mtu.com/upgrades/hoster.htm
Also, are you files on an External hard drive or on the C: drive?