frd.tmp files in user folder after login on server2003

I found this link that seems related. See if that helps:

 http://www.mcse.ms/message1230248.html

Removing full control from the permissions does not fix this problem. I removed full control and requested that the user reboot. upon logon another file was created. Any other ideas?

That post is a bit ambiguous. I think what they are saying is to "allow" full control. Apparently then the frd.tmp files are still created, but no longer of size o kb. That might let you see which application is creating the files.

Full Control was already allowed and this issue is happening. Removing full control has had no effect on this

The only hint I can find so far is that this has something to with redirecting the users home folder when they login. "frd" may stand for "folder re-direction".
The other hint seems to be that these may be created for users who use offline files. You can see some of these if you type "frd folder redirection" in a web search engine.

Still not sure about it's exact function, but certainly not malware, but it may indicate some misconfiguration.

This is caused by a group policy which is redirecting your user's My Documents and/or Desktop to a network location.  Depending on your needs you could try to remove this group policy for the affected user.  I'm just working on folder redirection for a client and found that if folder redirection is set in group policy but the policy is not applying correctly, then I too get these files appearing on the server.. although the user in question's My Documents are not redirection automatically..  So yes, could be permission related on the server, in that the policy is trying to apply but can't for some reason.  If I test with a new user (one that did not have redirection before) then it works fine.. My Documents gets redirected to the server.  But if I try to apply the policy to an existing user, then I too get these wierd files appearing.  Maybe try a "gpupdate /force" and see it that works...