When we try to mark a large sized network folder for offline availability Offline files/CSC may give an error saying “Incorrect functioin: Unable to make available offline“. This happens intermittently and the problem may disappear when we try to offline the share again. Microsoft confirmed that it is a bug in offline files and also released a hotfix to resolve this problem. For downloading the fix and for other details see the KB article //support.microsoft.com/kb/944898/en-us
Note that you also need to reinitialize the cache after installing the above fix. To know how to do this see the post How to reinitialize/delete offline files cache.
Note that this article applies to Windows XP/Server 2003 only.