Policies\Windows Setting\Scripts\Logon is the correct place to run the logon script. Is it the same windows 7 computers that are causing the issue, is it user specific, i.e. does it always fail if person x logs onto computer y?

It does sound like a slow link setting that may be causing the problem, or it may be that your computers or users are not in the correct gpo. You would be surprised how often people complain that the script doesn't work from the gpo and then its discovered that their computer or user account is in the default computer or user gpo and the script is being applied to a sub gpo such as ourdomain gpo which obviously does not include the aformentioned computer and user gpo's.

I would never have a script set to run from a specific server. It should be domain orientated because servers can go down and the group policies should be synchronised across servers, so its not a good idea to have a script run from a specific server.

It would helpful if you could test whether the script runs at all. It might be applying some of the settings, but not all of them, particularly the visible ones such as mapped drives and printers. There could be something as simple as the computer is logging on long before the network card is ready. I had a problem with a batch of computers that were new windows 7 computers and effectively the computers were booting too fast for the network card and such as users had to logoff and logon again to get the settings to apply. I fixed this by updating the network card drivers.