This is generally an issue with file security. The new user session is trying to update user environment. Best way to fix this is to turn on auditing and check both success and failures, then right click on (root drive) C: Properties>Security>Auditing Add Everyone;Domain Users, then select all success & failure, and check Replace auditing on subdirectories.
You will have to delete the user profile with the error, then login as the user to create a new profile. Then check the event log Security and note the Failure events. You can determine which files the setup of a new user profile is trying to access. Then you can change access to full control on each of these files. By default, the directory is setup with read only attributes. The system is trying to create the new user environment and cannot access these files properly. IE Explorer and Outlook Express will not setup properly until you do so. Be sure to change permissions on Conrtol.ini to full access located in the Windows or WINNT directory. This file must be accessable for changing by new users.
