The issue I'm having with tcpdump is identical to an issue addressed in a CentOS bug report so I'm copying the description here and providing a link in case it helps with fixing the problem.
http://bugs.centos.org/view.php?id=1570 tcpdump (14:3.8.2-10.RHEL4) on CentOS 4.4 i386 used with -C and -W switches like so: tcpdump -e -i eth0 -n -s 1518 -vv -C 1 -W 1000 -w trace.cap should generate trace.cap000, trace.cap001 and so on.
However, when the second file needs to be created, tcpdump stops with a 'permission denied' error, even when run as root in /root.