Transactional file writing in C# and Windows?

If you are using Windows 6 or later (Vista/7/2008/2008R2) the NTFS filesystem supports transactions (including within a distributed transaction): but you will need to use P/Invoke to call Win32 APIs (see this question).

If you need to run on older versions of Windows, or non-NTFS partitions you would need to perform the transactions yourself. This is decidedly non-trivial: getting full ACID functionality while handling multiple processes (including remote access via shares) across process and system crashes even with the assumption that only your access methods will be used (some other process using normal Win32 APIs would of course break things).

In this case a database will almost certainly be easier: there are a number of in-process databases (SQL Compact Edition, SQL Lite, ...) so a database doesn't require a server process.

DB basically uses a Journal concept (at least those one I'm aware of). An idea is, that a write operation is written in journal until Writer doesn't commit a transaction. (Sure it's just basic description, it's so easy)

In your case, it could be a copy of your file, where you're going to write a data, and if everything finished with success, substitute original file with it's copy.

Substitution is: rename original file like a old, rename backup file like a original.

If substitution fails: this is a critical error, that application should handle via fault tolerance strategies. Could be that it informed a user about a failed save operation, and tries to recover. By the way in any moment you have both copies of your file. That one when write operation just started, and that one when write operation finished.

This techniques we used on past projects on VS IDE like systems for industrial control with pretty good success.