Thank you for the info guys I will look into it more.
I am also experiencing some other odd behaviour with users running kixtart.bat in a Terminal Server environment. Does anyone know whether there is some problems with running kixtart under a TS environment? I have come to realise that all the problems we've been having with the logon script is all under a TS environment, not local. The initial local logon problems are all resolved now. Just wondering...