I tested it on WinXPproSP2 with Remote Desktop Client.
You can try to add ending backslash to the Value 'c:\remote\'.
You may also try to install the latest version of the client from http://www.microsoft.com/downloads/details.aspx?FamilyID=80111f21-d48d-426e-96c2-08aa2bd23a49&displaylang=en

>that doesn't work even with restart, does it matter that i am using remote desktop and upgraded from TS?
>Slán
>~M
>
>>Mark,
>>
>>Under registry key 'HKEY_CURRENT_USER\Software\Microsoft\Terminal Server Client\Default' add new string value with Name 'RemoteDesktopFolder' and Value 'c:\remote'.
>>
>>>i have just upgraded to remote desktop from TS client and i have saved the different connection settings into a folder c:\remote, however RD insists on looking into my documents first. does anyone know where this setting is held?