Folder redirection cannot redirect application data

We have a Windows 2003 DC and Windows XP as my client machines. We have implimented roaming profile. I created a new user account in an OU with no other policy applying on the OU only 1 Group policy with folder redirection. When I try to use Office it runs the setup everytime. I have checked in RSOP.msc the policy is applying. I have checked on the share (for application data) the folder is getting created. There are no errors in the event log. If I remove the policy (leaving the roaming profile enabled)then everything works fine. If I re-enable the policy after removing it once then the policy works fine. I have checked the fdeploy.log, userenv.log and the MPS reports. Was not able to find anything useful. The same issue happens with all the users and computers in my domain.

Please suggest what should be done?

According to your description, I understand that:

You would like to redirect Application Data folder to two servers.

If I have misunderstood the problem, please don't hesitate to let me know.

If you have tried to configure [User Configuration\Windows Settings\Folder Redirection\ AppData], let’s try to check settings:

1. Right-click AppData, choose Properties, on Target tab, choose Basic for Settings.
2. Choose "Create a folder for each user under the root path" under Target folder location.
3. Type the path of a shared folder, such as \\Server1\home1. You don’t need to use %homeshare% or %homepath%.

4. Run "gpupdate /force" on server and test. If there is no new folder created for users under \\Server1\home1, please refer to the following article to check shared folder permission.

You said, if you remove the policy, everything works fine, that means something is wrong with the group policy, either you have not created it properly or it is not being aplpied. I would suggest you to create the group policy from scratch. May be that will work... All the best... :thumbup1:

Look at the Policy for Recommendations for Folder Redirection will might solve your problem. See the link below :

Recommendations for Folder Redirection: Group Policy

Lets try to fix this using UNC:-

First of all go to the AppData > Properties and than on Target tab, select Advanced – Specify locations for various user groups. Now click Add button and to find the Group click Browse. Now select 'Create a folder for each user under the root path' and type \\Server1\home1 in Root Path. Click OK. Once done click Add button again, find group2, select "Create a folder for each user under the root path", type \\Server2\home2 in Root Path, click OK. You can also switch to Settings tab and uncheck 'Grant the user exclusive rights to AppData'. You also need to check mark the option "Also apply redirection policy to …" for Xp xlient machines. Once completed these setting run "gpupdate /force" and test.Hope this will work for you.

Yes If I remove the policy then it works fine but if I apply the policy back then also everything works fine. Here is the sequence of steps:

Policy applied --> nothing works
Policy removed --> Works perfect.
Re-apply policy --> Everything keeps working.

So I don't think there is anything wrong in the policy application.