A gpresult -v and a both reveal that the policy has been set, but the actual desktop as a user would see it does not show any files.
If you go into Windows Explorer as an actual window though, and click Desktop, the redirection is active and shows all the files.
This means that processing occurs while Windows is still working on presenting the logon screen.
There are some Group Policy settings that need exclusive access to the computer or user environment.
The latter might become important when you work with roaming profiles and start deploying Vista.
Check out this post about Windows XP and Vista interoperability of roaming user profiles for more information.
There is a setting that tells Windows to process Group Policy synchronously.
This is becoming a big problem as our users move around a lot.
In active directory under each user's Profile tab we have set: This works fine.