Windows SBS 2008 Folder Direction doesn’t work

blin2000
blin2000 used Ask the Experts™
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One of our clients enabled Folder Direction in thier SBS 2008. Both Vista and Windows 7 don’t work with this policy and the Event Viewer logs Event ID 502 - Failed to apply policy and redirect folder "Documents" to "\\SERVER\RedirectedFoldersusername\My Documents".
 Redirection options=0x80009231.
 The following error occurred: "Can not create folder "\\SERVER\RedirectedFolders\laxelrod\My Documents"".
 Error details: "This security ID may not be assigned as the owner of this object.

The group policy has been applied to the user as shown below.
Microsoft Windows [Version 6.1.7600]
Copyright (c) 2009 Microsoft Corporation.  All rights reserved.

C:\Users\laxelrod>gpresult /R

    Applied Group Policy Objects
    -----------------------------
        Windows SBS User Policy
        Windows SBS CSE Policy
        Small Business Server Folder Redirection Policy

    The following GPOs were not applied because they were filtered out
    -------------------------------------------------------------------
        Update Services Server Computers Policy
            Filtering:  Denied (Security)

        Update Services Client Computers Policy
            Filtering:  Denied (Security)

        Update Services Common Settings Policy
            Filtering:  Not Applied (Empty)

        Local Group Policy
            Filtering:  Not Applied (Empty)

        Default Domain Policy
            Filtering:  Not Applied (Empty)

    The user is a part of the following security groups
    ---------------------------------------------------
        Domain Users
        Everyone
        Offer Remote Assistance Helpers
        BUILTIN\Administrators
        BUILTIN\Users
        REMOTE INTERACTIVE LOGON
        NT AUTHORITY\INTERACTIVE
        NT AUTHORITY\Authenticated Users
        This Organization
        LOCAL
        Domain Admins
        Exchange View-Only Administrators
        Windows SBS Fax Administrators
        Windows SBS SharePoint_OwnersGroup
        Schema Admins
        Windows SBS Admin Tools Group
        Windows SBS Link Users
        Windows SBS Virtual Private Network Users
        Windows SBS Fax Users
        Exchange Recipient Administrators
        Windows SBS Remote Web Workplace Users
        Exchange Public Folder Administrators
        Exchange Organization Administrators
        Windows SBS Folder Redirection Accounts
        Enterprise Admins
        Denied RODC Password Replication Group
        High Mandatory Level

At beginning, I thought it is permission issue. I make sure in the Security of redirection folder and subfodlers, the user, creator owner and Authentication users have full permissions. For a test, I have mapped the redirection folder and I can create a folder under the username folder and I can copy the file to it. What could be the problem?

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Is this a migration or a clean install? It appears that the user is a member of the right groups.

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Commented:
I fixed it. It is a permission issue

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