Yet again, i'm updating my own post for future debugging reference for anyone out there who is having the same issues (ZD Backups under Preferences-->Backups does not work anymore). I now realize what might have gone wrong with my backup. My last good backup was some time in mid December 2011. And around that time, I was running the same ZD 7.1.2 (build 10978) 32 bit on Ubuntu 11.04 32 bit. THEN, one day on a good Friday I decided to let Ubuntu "upgrade" the o/s to Ubuntu 11.10 Oneiric.
The upgrade went fine as far as keeping all my Documents, VirtualBox configs and VirtualBox machines ( I have a Windows 7
VB Home Premium and 2 SuSe Linux
VB's) intact as well as, more importantly, my Zimbra Desktop (or so I thought). After the upgrade, I fired up ZD and it opened up with no isssues at all. All my 3 email accounts were still intact and I was able to send and receive emails from each account. Only yesterday that I discovered that the ONLY thing the Ubuntu upgrade broke was the ZD Desktop (hey, had to blame it on somebody right

).
To this day, i'm still unable to figure out how to Backup my ZD. I know there is really no way to hack/restore my existing ZD in $HOME/zdesktop into a new one so this leave me (and all ZD users like me) no choice but to rely on the ZD Backup feature which is not working for me at the moment.
I tried re-installing ZD by downloading it again, renaming my $HOME/zdesktop to $HOME/zdesktop-bkup and renaming /opt/zimbra to /opt/zimbra-bkup, then running the installation script again. It installed fine as expected and it opened up ZD fine but when I tried the Backup feature from Preferences again, I got the same error I posted on top of this thread.
So I would appreciate it if someone could shed some light on this. Thank you in advance.