Mike,

I encountered a similar problem under windows nt terminal server. It had to do with a limitation on the number of open files. MS released a SP that helped overcome this problem. It allowed each virtual circuit to open 2048 files. But in order for this feature to become available a registry key had to be modified.

If this is the same problem you are encountering, the following links may help you solve your problem.

http://support.microsoft.com/support/kb/articles/Q219/9/56.ASP?LN=EN-US&SD=msdn&FR=1&qry=Q219956&rnk=1&src=DHCS_MSPSS_msdn_SRCH&SPR=FOX

http://support.microsoft.com/support/kb/articles/Q190/1/62.ASP

Hope this helps

Ben