The Dissolve tool is not working for me when I use ArcGIS Desktop 10 to dissolve a shapefile.
ERROR 999999: Error executing function.
It works perfectly when I use version 9.3.
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The 99999 error can be caused by any number of reasons; system resource availability or dataset issues are a couple possibilities. While disabling background processing may seem to have solved the immediate problem it actually is only a workaround to another problem. All tools (aside from the 5 or 6 which absolutely cannot run in the background) do function through background processing - there however might be one off cases or bugs for a particular situation which causes tools not to run. In general, the dissolve tool functions fine through background processing.