BTW, forgot to mention the OS is WinXP. Courtesy of Damon Xu of MSFT, here are the steps he provided to me on a MS NG. They do work.

1. Make sure the local user is created. (Note: make sure the local user has Administrator rights.)

2. Log on as the local user to create the profile folder and correponding
registry entry.

3. Log on as domain user, locate the registry key HKLM\SOFTWARE\Microsoft\WindowsNT\CurrentVersion\ProfileList, the subkeys under the Profilelist key are the user's SID. Check the ProfileImagePath value in each subkey to find the domain user SID and local user SID key.

4. In the local user SID key, change the data of the ProfileImagePath entry
to the locatation of the domain user profile folder. (Note: The system checks
this entry to load the profile folder.)

5. After that, right click the HKEY_CURRENT_USER key, click Permissions, add the local user and set Full control.

6. Make sure the local user has Full control on the domain user's profile folder.

>YOu can go to the profile folder of the user account for the local user and change the home directory to the domain user's home directory. Then you have to give rights to that directory separately for the local user of course.