If the step does not complete, it is likely still waiting for the xcopy process to exit. Is the xcopy.exe process still running (check with Task Manager or Process Explorer)? Is it possible that the command is still copying or scanning for files to copy?
I did a test here, copying some 70MB+ files from one network share to another like that with VBP 7.7, and it worked as expected.
Some things you could try:
1) Drop the %DOSCMD% prefix (xcopy is not an internal cmd.exe command, so that's not needed)
2) Configure the step to terminate after some period of time (More tab)
3) Use Robocopy instead:
http://en.wikipedia.org/wiki/Robocopy
4) Use the Copy Files action instead:
http://www.kinook.com/VisBuildPro/Ma...ilesaction.htm