"My Places" on open and save UI

[originofsymmetry]

I have tried using the group policy to modify the contents of the MY Places pane on a open and save dialog box but it will not apply properly. I want Recent, My Doucments, and My Computer to show on the pane and when I type these into the group policy and fresh it, I logon as a student to find the three Places there but two links to system 32, which then changes to a link to My Computer. It appears that it is constantly trying to fill all 5 Places but I only want the three to show

 

Windows Server 2003 R2

Windows XP Pro SP2 clients

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As you can see, a system32 folder has appeared that, when clicked, opens My Computer. I just wanted My Computer, My Documents, My Music and My Pictures, but Windows apparently wants to fill all the Places. Any ideas?