VBS Startup Script

Is it installing local printers or shared printers? What version of AD are you using? It would be easier to manage and deploy printers using Group Policy Preferences instead of scripts.
http://blogs.technet.com/b/grouppolicy/archive/2009/06/24/gp-preferences-set-a-default-printer.aspx

There are a few possibilities and hard to troubleshoot without seeing the script.
1) You have made a script that installs printer per user and you have the script running at windows startup before users a logged in.
2) Permissions issue

There are more possibilities, but lets start there. But it is best to use GPOs for the install and configuration of printers with the use of a print server will make it easier to manage.

AD 6.1

I just figured out that when I apply the script it was running on user.

This is what we are trying to do.

We want to install printers via GP by computer config and not user. We do not want to use loopback. We can install printers via GP by computer config but cannot set the default printer. If there is a way to set default printer based on computer config, that would work for us.

It's a per user setting and cannot be set globally. You either need to use loopback processing or let the users choose.

Why don't you want to use loopback processing? Or GPP?

We were told that lookback cause slow login times.

It all depends on the policy settings. All loopback does is merge (appended the policies to the list of user policies to apply) or replace (removes the list of user policies to apply and adds the relevant list according the GPO links).

if we use loopback does the other settings from a GPO above user or computer settings get disabled?

So merge should run quicker than replace?