This occurs as a result of a bad statement in the actual xml file. I have done a lot of work on this file before. If you need help, attach it as a file and I'll take a stab at fixing it for you, shouldn't take long. I will then report back here my findings. Export the actual policy that you gave us a snapshot for above. It would be the on-access default processes policy of this actual policy.
Thank you for quick attention to my question. I don't want to post our exported policy here on the public forum. Do you have an email address I can use to send to you, or perhaps a FTP site?
Here is what I found. I examined the xml file in notepad for the policy that was sent to me.
I looked down the initial list to the ‘Workstation Default Exclusions’. This is where the damage was.
<Setting name="ExcludedItem_76" value=" Inc"/>
<Setting name="ExcludedItem_77" value=" Inc\"/>
<Setting name="ExcludedItem_76" value="3|7| Inc"/>
<Setting name="ExcludedItem_77" value="3|7| Inc\"/>
I saved the policy and imported and found another error at the bottom of the ‘Server Default Exclusions’ list.
<Setting name="ExcludedItem_241" value="3|7|“%program files%\System Center Operations Manager 2007\Health Service State"/>
<Setting name="ExcludedItem_241" value="3|7|%program files%\System Center Operations Manager 2007\Health Service State"/>
The file was saved once again and imported to ePO. All errors have been corrected.
You have to be very careful not to cause a syntax issue to the xml formatting over and above the actual issue. If you do you will receive an error that the "Policy could not be imported because the uploaded file is either corrupt or in an unexpected format."