SBS2011 GPO issues deploying to XP repair steps

Step 1) Check logs of workstation and see if you have a gpt.ini error. If so check

TCP/IP NetBIOS Helper service is set to Automatic and running
Net Logon service is set to Automatic and running
Remote Procedure Call (RPC) service is set to Automatic and running
Do a GPupdate /Force and you should see them applied

Referenced article: http://support.microsoft.com/default.aspx?scid=kb;EN-US;887303

If they are applying but not actually doing anything (drives weren’t mapping in my case)

Step 2) Make sure your XP desktop has every possible update and optional patch that may apply installed. It appears the .NET 4 patch (the last one installed) got it applying

If that still does not work it may also have a timing issue

Step 3) Create the following Dword in registry with decimal value of 60 (as in 60 seconds, change value as needed):

HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\Winlogon\GpNetworkStartTimeoutPolicyValue

Note: This will delay startup time but in my case also made it work.

Referenced article: http://support.microsoft.com/kb/840669

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