Error Code -36 when backing up files

Hello
I have a new MBP and I have a smaller 200 gig drive that I have used for about a year for my old laptop. I took all the stuff I wanted off this external drive, moved to my MBP and then erased and formatted (Mac OS journal)
When I tried to set up my time machine (since I don't have that much on my hard drive right now and until my new 500 gig hard drive arrives)
When using "Time Machine" I keep getting the error "Unable to complete backup. An error occured copying files to the backup volume" There is no error code at all.
Could it be that my MBP hard drive is 320gig and the external is only 200 gig?
I did disc utility a couple of times, verified it and there does not appear to be any errors on the drive.
So, instead of using “Time machine” I decided to drag and drop the home folder, it processed and moved files for a few minutes, then I got this error message "the finder cannot complete the operation because some data in "iPhoto Library" could not be read or written" (error code -36)
I did some googling about the -36 error code, but found a few different things, one being that there is a problem with some people with moving over files larger than 2 gigs (???) and the other is that a -36 error could mean the external hard drive going out.
I am doing another disc utility and a repair permissions to see if that helps, but in the meantime, does anyone know about this issue?
Thanks!