I am getting this permission denied error on Windows 2008 trying to create a tablespace.
template1=# create tablespace testtablespace location 'c:/windows/temp1/testtablespace'; ERROR: could not set permissions on directory "c:/windows/temp1/testtablespace": Permission denied
why are you putting database tables in the Windows directory?!? I would instead put them somewhere like
C:\Users\postgres\AppData\Local\Temp (assuming C:\Users\postgres is the %USERPROFILE% directory for the postgres service owner...)