"Failed to configure propagation share" error when configuring search server

I have two front-end servers and a dedicated index server - FE01, FE02 and INDEX01. I configured the index server as an indexer and FE01 as a search/query server with no problems. However, when I tried to configure FE02 as a second search/query server, I got the error message "Failed to configure propagation share".

I couldn't find any resolution on the Web, so this is how I sorted it:

1. Manually configured the Office SharePoint Server Search service as Manual startup and the Search service account credentials (domain\sp_search_svc) on the Log On tab. I did NOT start the service.

2. Navigated to the SharePoint data folder 'E:\Program Files\Microsoft Office Servers\12.0\Data\Office Server' and created a new folder called 'Applications'.

3. Shared the folder with the share name 'searchindexpropagation' and description 'Microsoft Office SharePoint Server Search propagates index files through this share'.

4. Configured Full Control share permissions for the 'sp_search_svc' domain account & 'wss_admin_wpg' local group.

5. Configured folder security by adding Modify permissions to the 'sp_search_svc' domain account.

6. Configured the search/query server as normal through Central Administration, but instead of selecting to auto-create the propagation share, I selected to use STSADM instead.