Like all of you, I was having this same issue and was not willing to give Read/Execute to all of the home directories to every student. That would be stupid and would allow every student to access everyone elses home directory.
But, I found a solution while trying to fix this and I thought you would all want to know about it.
The solution posted above is true, for publisher to work your users have to have Read/Execute to every folder along the way, BUT they do not have to have rights to everything underneath it.
Remote your file server and open Server Management --> Roles --> File Services --> Share and Storage Management.
Right click on the share with your user's home directories in it and choose Properties
Click Advanced and check the "Enable Access Based Enumeration" box if it is not already enabled. Click OK
Go to the Permissions Tab --> NTFS Permissions
Add Domain Users with Read/Execute/List Files --> Apply
On the Permissions Window, click Advanced
Choose Domain Users and click Edit
Change Apply To from "This folder, subfolders, and files" to "This Folder Only"
Click OK on all of the windows to save the changes. What this means is that you have given read and execute to only the folder and nothing inside of it, this is enough to fix publisher. Also, with the access based enumeration enabled, if your students browse to that folder, they will only be able to see their home directory in the list because it is the only folder they have rights to.
You will have to do this to every folder in the user directory path. For us it was simple as our 8th Graders home directories are \\server\8\Jimmy. So we added these rights to the 8 folder. if your home directories are \\server\home\students\8\Jimmy. You would have to add these permissions to the home, students, and 8 folder.
