Group policies for folder redirection in Win2K8/Vista/Win7 are different than for Win2K3/XP. What you need to do is go into the local group policy settings on the terminal server and set the folder redirection settings there. You'll see that they look different from the Win2K3/XP policies you are currently using. If you are going to be integrating Win7 workstations into your domain, you can also make these policies applicable on a domain-wide basis by following these steps, excerpted from the Technet article:
http://technet.microsoft.com/en-us/library/cc766208(WS.10).aspx (Note that this is a Vista article, but the same procedures apply to Win2K8)
Create a central store
The central store is a folder structure created in the SYSVOL directory on the domain controllers in each domain. You will need to create the central store only once on a single domain controller for each domain in your organization. The File Replication service then replicates the central store to all domain controllers. It is recommended that you create the central store on the domain controller acting as the Primary Domain Controller Emulator FSMO role because the GPMC and the Local Group Policy Editor connect to the primary domain controller by default.
The central store consists of a root-level folder containing all language-neutral ADMX files and subfolders containing the language-specific ADMX resource files. Note When there is no central store, the GPMC and the Local Group Policy Editor read the local versions of the ADMX files used by the local GPO on your Windows Vista administrative computer. To perform this procedure, you must be a member of the Domain Admins group in Active Directory.To create a central store:
Create the root folder for the central store %systemroot%\sysvol\domain\policies\PolicyDefinitions on your domain controller.
Create a subfolder of %systemroot%\sysvol\domain\policies\PolicyDefinitions for each language your Group Policy administrators will use. Each subfolder is named after the appropriate ISO-style Language/Culture Name. For a list of ISO-style Language/Culture Names, see Locale Identifiers. For example, to create a subfolder for United States English, create the subfolder: %systemroot%\sysvol\domain\policies\PolicyDefinitions\EN-US.
Populate the central store with ADMX files
There is no user interface for populating the central store in Windows Vista. The following procedure shows how to populate the central store using command line syntax from the domain controller.To populate the central store:
Open a command window: Click Start, click Run, and type cmd, and then press ENTER.
To copy all language-neutral ADMX files (.admx) from your Windows Vista administrative workstation to the central store on your domain controller using the copy command, type:
copy %systemroot%\PolicyDefinitions\* %logonserver%\sysvol\%userdnsdomain%\policies\PolicyDefinitions\
To copy all ADMX language-specific resource files (.adml) from your Windows Vista administrative workstation to the central store on your domain controller using the copy command, type:
copy %systemroot%\PolicyDefinitions\[MUIculture]\* %logonserver%\sysvol\%userdnsdomain%\policies\PolicyDefinitions\[MUIculture]\
For example, to copy all United States English .adml files, type the following:
copy %systemroot%\PolicyDefinitions\EN-US\* %logonserver%\sysvol\%userdnsdomain%\policies\PolicyDefinitions\EN-US\
However, note that if you create a central store, those policies that are Win2K8/Vista/Win7 specific still have to be administered from the Win2K8/Vista/Win7 machine.