First question: Does the use have enough rights to write in the profiles directory?
Should it save locally or is it part of a network and should it copy to a network share? In that case, check both the NTFS (if the share is NTFS) permissions and the share permissions.
Are you sure the profile isn't mandatory? (you can check this by looking in c:\documents and settings\<username>. If you see a ntuser.man, it's supposed not to save. If it's ntuser.dat, it should save changes.
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