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Windows 7x64 Home Directory Renaming on Domain Controller

We are a small company and only purchase a few computers at a time.  Previous OS was Windows XP on a Windows 2003 Server.

We've recently started joining newly purchased Windows 7x64 bit computers to our Windows 2003 Domain Servers.  When we do this the users Home Directory on the Server gets a new icon that looks like the old folder icon, but with a tiny document in front of it.  We are having problems with some users.  Their Home Folder does not take on the users name, but the name Documents. Even though the properties of the Documents folders have the correct security.   When I try and rename one of the Documents folders with the correct users name on the Server all the folders that are named Documents rename.  Even though they are for different users.  There are three parts to my question.

1) Why is my server allowing a folder with the same name?

2) Why is the folder renamed at all when I join the computer to the domain and logon as the user.

3) Keeping in mind we only join 1 or 2 computers each time to the domain, What is the best way to join the Windows 7 computers to the Domain to prevent this from happening?
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rsoly777
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Let me clarify:  

These are not New users but users that were previously running a Windows XP computer.  The Home Directory had their name already.  

No new folder was created.  

The OLD folder was renamed Documents. and then only some of the users were named Documents, other users folders were not renamed.
Have you checked the system and the application logs on the server and affected machines?
How do you have the folder redirection set up are you using group policy? Or is is a login script?
I believe it uses a logon script, but I'm checking that out now.  This was setup via a third party consulting firm.  I will post back when I know that information.
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Though the solution proposed by rsolv777 was accurate it does not explain why I was getting the strange behavior of folder renaming on the server.  However it does provide a solution for future use.  Thank you for your help rsolv.  Please post back here if you ever find the reason for the folder renaming.