I have a similar problem, I got this problem after I removed a lot of generic settings from the user hive (I use mandatory profiles). As we set the profiles up with a test user to ensure correct operation the My Documents folder is directed to the wrong area which is not a good thing. I removed this setting and also a lot of other references to our test user. All I can think of is that I have removed some office settings as well I am going to test this out this morning and I will post another reply if it works.
