This is a very strange issue I have never seen before. User Group Policies fail to apply to the workstation. I turned on logging and this is what it told me: Zenworks 7.01 NW backend 6.5 SP3.

11/27/2006 14:23:18:140 Full Object DN m.6.Students MS.K8.NPSD
11/27/2006 14:23:18:140 Calling WMGetAllAssociatedObjects(FALSE, zCX, 1, m.6.Students MS.K8.NPSD, 779704684, zenwmGroupPolicy, 512, pBuffer)
11/27/2006 14:23:18:140 Reverting to system impersonation.
11/27/2006 14:23:18:140 Wrote reg. value 0x1 to User Has Group Policies in key Software\Novell\Workstation Manager\Group Policies
11/27/2006 14:23:18:140 Found DN MSUser Package:Windows XP:Windows Group Policy.Policies.NPSD
11/27/2006 14:23:18:140 WMCheckIfGroupPolicyObjectsChanged entered
11/27/2006 14:23:18:140 Group Policy object has NOT changed!
11/27/2006 14:23:18:140 Exiting WMCheckIfGroupPolicyObjectsChanged 0
11/27/2006 14:23:18:140 Entered ScheduleCleanup.
11/27/2006 14:23:18:140 Loaded wmschapi.dll
11/27/2006 14:23:18:140 Calling WMScheduleAction
11/27/2006 14:23:18:156 Finished Calling WMScheduleAction. Returned 0x0
11/27/2006 14:23:18:156 Exiting ScheduleCleanup 0
11/27/2006 14:23:18:156 Entered BackupOriginalGP.
11/27/2006 14:23:18:156 Machine is XP sp2 or greater
11/27/2006 14:23:18:156 Exiting BackupOriginalGP 0
11/27/2006 14:23:18:156 GP has not changed, using cached policy.
11/27/2006 14:23:18:156 Entered RestoreCachedGP.
11/27/2006 14:23:18:156 Read reg. value Group Policy User Flags: 0x80000024in key Software\Novell\Workstation Manager\Group Policies
11/27/2006 14:23:18:156 Reg key Software\Novell\Workstation Manager\Group Policies\Group Policy Machine Flags not found. Assuming 0
11/27/2006 14:23:18:156 Read reg. value Group Policy Machine Status: 0x4000 in key Software\Novell\Workstation Manager\Group Policies
11/27/2006 14:23:18:156 Reg key Software\Novell\Workstation Manager\Group Policies\Group Policy Machine Flags not found. Assuming 0
11/27/2006 14:23:18:156 Workstation Cache is invalid (Status: 0x4000)
11/27/2006 14:23:18:156 Error 2 calling GetFileAttributes(C:\WINDOWS\system32\GroupPolicy. WMOriginal2\Machine\Registry.pol)
11/27/2006 14:23:18:156 Read reg. value Group Policy User Status: 0x3000 in key Software\Novell\Workstation Manager\Group Policies
11/27/2006 14:23:18:156 Read reg. value Group Policy User Flags: 0x80000024in key Software\Novell\Workstation Manager\Group Policies
11/27/2006 14:23:18:156 Read reg. value Group Policy User Flags: 0x80000024in key Software\Novell\Workstation Manager\Group Policies
11/27/2006 14:23:18:156 Read reg. value User Has Group Policies: 0x1 in key Software\Novell\Workstation Manager\Group Policies
11/27/2006 14:23:18:156 Workstation cache is not in effect
11/27/2006 14:23:18:156 User cache is in effect.

The problem is I don't have user cache in effect. It looks like it uses group policy cache on the PC instead of pulling it down from the server. I do not have cache user settings checked in the policy. I am trying to find a reg entry that forces this off, but I have had no luck and don't even know if I am barking up the right tree. Has anyone seen this happen and what other things can I do to fix this?