Offline Files / Folder Redirection

I recently reformatted a Windows XP Laptop on my domain set up to use My
Documents redirection (to a server) with Offline Files. When I logged on as a
standard user, it came to my attention that Documents were being stored
locally and weren't being synchronized with the server. I looked in the Event
Log and found two related Errors:

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Event Type: Error
Event Source: Userenv
Event Category: None
Event ID: 1085
Date: 6/7/2008
Time: 3:11:20 PM
User: NT AUTHORITY\SYSTEM
Computer: LAPTOP
Description:
The Group Policy client-side extension Folder Redirection failed to execute.
Please look for any errors reported earlier by that extension.

For more information, see Help and Support Center at
http://go.microsoft.com/fwlink/events.asp.

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Event Type: Error
Event Source: Folder Redirection
Event Category: None
Event ID: 106
Date: 6/7/2008
Time: 3:11:20 PM
User: DOMAIN\User
Computer: LAPTOP
Description:
Failed to perform redirection of folder My Documents. The full source path
was <C:\Documents and Settings\User\My Documents>. The full destination path
was <\\Server\Accounts$\Documents\User\My Documents>. At least one of the
shares on which these paths lie is currently offline.

For more information, see Help and Support Center at
http://go.microsoft.com/fwlink/events.asp.

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I can manually change the target of the Documents folder to the Server,
however I receive 'Access is Denied' errors for every file when attempting to
Synchronize. Everything still works fine on Administrator accounts, although
the Folder Redirection Policy is applied to all users on the domain. Changing
permissions on the Documents folders has no effect whatsoever on the issue.

Help would be greatly appreciated.