You say you are doning backups from 9AM to 12 PM that means that you are taking 3 hours to backup a database that can't exceed 10 Gig (the max limit of SQL Express 2008R2). There is something wrong with that statement. I can backup a 200 Gig DB in 20 min on my desktop machine. That is including setting the back to be compressed. This is an option in SQL Server 2008 to allow for smaller backup files. If you use this feature the backup becomes more CPU intensive (the CPU will be performing the compression alogrthym). If you can't pin this to a specific time of the day then maybe you need to be running a server side SQL trace (this is cause some performance issues if not done properly) to see what is actually occuring on the SQL Server at the time of the slow downs.