I've created a base image, with the Default User Profile created like I
want. I used SYSPREP to prep it, then image it to a machine. It goes
through it's thing and when a user logs in, with DLU enabled, it does not
apply the settings I have set in the Default User Profile (Start menu,
Desktop, Power Settings, etc)

Any Ideas why this is not working?

Am I using SYSPREP wrong?