Win7x64, IE9. User1 has two kinds of favorites in IE: GPO-distributed and custom-saved. The former ones work just fine, the latter ones if accessed through IE don't open anything and error message is "The target "" of this IE shortcut is not valid." Custom-saved shortcuts are on the user1's home drive, re-directed via GPO. Another user2 on the same computer or another computer has no issues opening user1's custom-saved shortcuts if accessed through explorer.
Tried re-creating user1 profile on her computer, tried re-creating her AD account to no avail. She runs into the same problem regardless of the computer she uses.