Group policy not applying Server 2008 Terminal Server

Loopback is enalbed on the Default Machine Policy, which is linked to the terminal server OU. It's set to replace.
However GPresult shows this GPO as filtered out for users:

The following GPOs were not applied because they were filtered out
-------------------------------------------------------------------
    Local Group Policy
        Filtering:  Not Applied (Empty)

    Default Machine Policy
        Filtering:  Disabled (GPO)

Hang on, I think I've got it now.
The Default Machine policy scope was for Authenticated users only.
When I removed this security filtering, it seemed to work.
I would have thought the user counted as an authenticated user, seeing as they logged on successfully?

You removed it and what did you add, just authenticated users should have been ok

I didn't add anything. So the security filtering section is now blank.
My understanding is that it will apply to all users if no filtering is present?

Yes having authenticated users on a policy that you wanted to have apply to machines might be an issue.  As the machine section is not per user it authenticates per login as the computers account.

Authenticated users does include computers.

Check the ACL on the GPO to see what the exact permissions are.

Thanks

Mike

Hi Mike,
I checked the ACL, and authenticated users is added with read access. They are added authomatically when i add auth users to the security filtering.
However, I still get
 Default Machine Policy
     Filtering:  Disabled (GPO)

Any ideas? I would prefer to get it working logically as it should, rather than using work arounds.