Windows cannot load the user's profile but has logged you on with the default profile for the system

"Windows cannot load the user's profile but has logged you on with the default profile for the system.
 DETAIL - Insufficient system resources exist to complete the requested service."

One Windows XP Pro SP3 workstation on my LAN is set up as a terminal services server.  A terminal services program Winconnect Server XP is installed enabling the machine to host up to 10 RDP sessions (and it usually hosts 7 sessions).  

Users sometimes get the above error message when logging on remotely to this machine.  

After the machine has been freshly booted, approximately 4 - 5 users can use the system happily.  Then a few hours later someone will try to log in remotely and after entering his username and password he will get the above error message and a countdown box.  When the countdown finishes, he is kicked out of the logon screen.  Once this happens no one else can log on remotely either.   But I can log on locally and when doing so I get the same error, but instead of being kicked out I am logged on with the default profile like the message says.

If everyone logs off and I reboot the machine things run happily again.  People who could not log on before can after.  So I dont think their profiles are corrupted or that there is a permission problem.

I do not know if the problem is related to the number of users or the length of time they are logged on.    The problem has started happening only in the last few days and previously we have had up to 9 people logging onto the machine with no problem.  It has been running successfully for almost 2 years.

The error message complains of insufficient resources.  The machine has an Intel Core2Duo processor and 3 GB RAM.  At the time the problem occurs the machine is using only half its page file, only 1/3 of its physical RAM according to Task Manager, and only 1/3 of its hard drive capacity (100GB free).  So I dont understand which resources are in short supply.

The page file was set at 2 GB and I understand it should be set to approximately 1.5 times the RAM.  So I have set Min = Max = 4974 MB, although I dont think this will make any difference since only half the page file (1 GB) was being used anyway.

1.      Could this have anything to do with the server?  Like the other machines on the LAN, the problem machine logs onto a Windows SBS 2003 server.  However, the other machines are having no problems.

2.      Might this have anything to do with the registry size?  How can I check that?

3.      Could this have anything to do with the terminal Services software, Winconnect Server XP?

4.      What else could I try to solve this problem?


I dont know if it is related, but I am having problems with Outlook using Word as its email editor and slowing Outlook down on the same machine as posted here http://www.experts-exchange.com/Software/Internet_Email/Email/Email_Clients/Q_24611958.html , but I havent got a solution for that problem yet.  In the meantime I have had all users disable Word as their email editor and although Outlook is running much better this logon problem is still occurring.

I am getting the following error in the Application log:
Event Type:      Error
Event Source:      Userenv
Event Category:      None
Event ID:      1505
Date:            10/09/2009
Time:            3:08:46 p.m.
User:      MyDomain\username
Computer:      TS-SRV01
Description:
Windows cannot load the user's profile but has logged you on with the default profile for the system.

 DETAIL - Insufficient system resources exist to complete the requested service.

Wow that was long-winded.  I hope someone can help!
Thanks,
Cliff