no default printer in terminal session

Added two new users to terminal server, cannot set a default printer, check mark does not appear, same thing happens if I log onto server as admin in console, I cannot set a default printer.
User app needs to have a default printer to work.
There is no GP set for printers and others do not have this issue.
Who is Participating?
1.check the setting for this in local policy...

"Do not set default client printer to be default printer in a session"

If this is not configured or not enabled, the default printer that is defined on the workstation will be used as the default printer in the terminal session

See this link on Group Policies for Terminal Services:

2.Do you have all latest patches and sp installed,
copied the default user folder from another server with the same version and SP see if it works.

3.In the below link the poster had the same issue, problem was solved by copying the default user profile from another server.

If you don't have another default user profile to copy, try the steps to recreate the default user profile in this link:
phsteffensAuthor Commented:
Actually found that the terminal servers default profile template was corrupt,
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