If you get the error "Incorrect Function" on a Windows Server 2008 or 2008R2 when trying to share a folder or create a file share then you will find the error message "INCORRECT FUNCTION" is extreemly useless.
It occurs because you don't have the Firewall Rules for Inbound and Outbound "File and Printer Sharing" included in your rule sets.
But I have firewall disabled I hear you cry! For Windows it doesnt matter if you have the Firewall on or off for any of the Profiles. If you dont have the rules there you cant share folders......
Dont know why this is but it just doesnt work and gives the silly error message above.