Cannot create profile directory

I HAVE A WIN NT 4.0 DOMAIN

We are setting up our first Win2k lab and I have a problem. We have a couple of hundred users ( we are a school district) and most, but not all, are having problems logging in with a Win2k machine. They have NO problems from our Win98 computers.
They log in to the domain with a valid username and password but we get the following errors:

Windows cannot create a profile directory .pds using local profile Detail – Access denied

then the next error message:
Cannot locate local profile will use temporary profile.

All users are identical, same groups, same login script and none have roaming profiles. But some get in and most have the same errors.

What’s up?