Problem with dir.create (R2.2.0 Windows XP 2002 SP 2)

I've run into a problem with dir.create on R2.2.0 Windows XP 2002 SP 2.

setwd("d:/")
print(dir.create("d:\\otis-sim\\rdata", recursive=T))
print(dir.create("d:\\otis-sim\\", recursive=T))

Both return false and fail to create the directories.

setwd("c:/")
print(dir.create("d:\\otis-sim\\rdata", recursive=T))

Returns true and succesfully creates the directories.

Why does this occur?

Hadley