Figured out the problem. Ashamed to say "End Loser Error"
DAR2 was previously installed and running a backup as well as e-smith-backup. Apparently with the older version of e-smith-backup I could run a backup from DAR2 and from e-smith-backup without conflicts. (I didn't really realize I was running two different backups). To fix the problem I had to
1 - remove all backup jobs from DAR2
2 - remove the backup ibays on the remote SMEServer that I was using for storing the backups
3 - Rebuild the backup ibays on the remote SMEServer
4 - Rebuild the e-smith-backup configuration and restart the jobs
Everything is now running fine and selective backup works great. Sorry about the wasted space!
Sal