This can be caused by numerous issues, depending on the error message you are getting. Try this link:
http://www.microsoft.com/technet/treeview/default.asp?url=/technet/prodtechnol/exchange/exchange2000/support/troubowa.asp
This appears to be a network issue so you can prove it out by telneting from the client to the terminal server via port 3389 (as long as you have ts server listening on the default port). If you cannot connect then it is probably firewall/network related.
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