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do you run the peer with a windows service account?
The peer needs to have access to the network. Since you are using an admin share, C$, the TSO peer service account needs to have permissions to access the remote share.
In the past I've authenticated against the target system first and then executed the xcopy command.
You can use the <commands><command> structure to execute multiple commands in the same adapter call.
<command>net use ...</command>
<command>net use * /del</command>
To evaluate each command, I'm using this XSLT:
PowerShell is another option. The adapter provides similar handling as the SSH adapter.