I've tried the application with an external driver, and everything worked quite well. There were no issues or problems while installing or using the application. If you have an older version of the software, then I recommend reinstalling the latest version through the download link posted below.
Download link: http://www.memeo.info/download/instantbackup/general/4.7/7974_me_ib_en-US_setup.exe
Go to Start > Run > devmgmtm.msc and check to see if there is any item in yellow in the Disk Drives and USB category. In case there is something, right click it and choose Windows Update.
If you still have issues, then you should check the hard disk for errors. Connect the drive to another PC to see if it recognizes it well.