I used to have a 2003 domain. The majority of client computers are running Windows XP SP3. Everyone's desktop and My Documents are redirected to a DFS domain shares which are replicated between two DFS servers. Offline files are configured for everyone. This configuration was working for a few weeks without any problems.
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I recently installed two new 2008 R2 domain controllers. I demoted and removed the 2003 DCs. I raised the forest function level to 2008 R2. Everything continued to work fine. Shortly after this I noticed problems with the XP clients. It seems offline files no longer work. When the computers boot up and they are not connected to the network, the users will receive error messages saying \\namespace\share\username\desktop is not accessible. Attempting to open My Documents folder gives the same error message. All the folders and files have the small blue sync arrows on the icon, and I have tried manually synchronizing and it seems to do so without any problem. The same errors happen if the computer is already turned on with the user logged in; as soon as I unplug the network cable the icons vanish from the desktop and the user cannot get access to their documents.
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I have noticed other peculiarities as well: when on the network, the user will get a warning when trying to open the My Documents folder that says "This page has an unspecified potential security risk. Would you like to continue?" CLicking yes opens the folder without any problems. I have Googled this error message and nothing I have found applies to my configuration. This error only started within the last few days and might not be related. It may also be worth noting that none of the Windows 7 clients are having any of these problems. If an affected user of an XP machine logs into a Windows 7 computer, everything works fine including offline files. This is only affecting XP systems.
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I have tried re-initializing the offline cache on the XP clients and this does not help. I have disabled the offline files feature, deleted all the files in the offline cache, reinitialized, rebooted, reconfigured everything, synchronized successfully, and then tried again and it doesn't work. Other information: We only are using a single AD site. Users and computers accounts of the XP and Windows 7 systems that I have been using for testing are located in the same OU with the same GPOs applying.
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UPDATE: The source of the "This page has an unspecified potential security risk. Would you like to continue?" error message has been discovered and resolved. The namespace on the DFS server is \\domain.local\share. In the folder redirection GPOs I had been using \\domain\share without the ".local" and it was working fine. When I changed the GPOs to \\domain.local\share for consistency sake, the error started. Changing it back to simply \\domain\share in the GPO fixed this issue.