Thanks for that that has helped a bit...
On the DC the policy shows a red warning cross and in the properties it says:
"Policy engine did not configure group policy object......etc"
I have had a look in the winlogon.log as it suggests but this doesnt really explain why it isn't applying.
Last few days of that log follow:
23 November 2007 04:49:40
----Configuration engine was initialized successfully.----
----Reading Configuration Template info...
----Configure General Service Settings...
Configure Messenger.
General Service configuration was completed successfully.
----Configure available attachment engines...
Configuration of attachment engines was completed successfully.
----Configure Security Policy...
Configure password information.
System Access configuration was completed successfully.
Audit/Log configuration was completed successfully.
Configure machine\software\microsoft\windows nt\currentversion\winlogon\passwordexpirywarning.
Configure machine\system\currentcontrolset\services\lanmanworkstation\parameters\requiresecuritysignature.
Configuration of Registry Values was completed successfully.
----Configure available attachment engines...
Configuration of attachment engines was completed successfully.
----Un-initialize configuration engine...
this is the last GPO.
**************************
Make a local copy of \\ourdomain.org\SysVol\ourdomain.org\Policies\{58ECB686-50F7-45BC-A1DA-6CD56FE3B38A}\Machine\Microsoft\Windows NT\SecEdit\GptTmpl.inf.
GPLinkOrganizationUnit GPO_INFO_FLAG_BACKGROUND )
Make a local copy of \\ourdomain.org\sysvol\ourdomain.org\Policies\{FC986906-3391-433E-811E-C52C1303133E}\Machine\Microsoft\Windows NT\SecEdit\GptTmpl.inf.
GPLinkDomain GPO_INFO_FLAG_BACKGROUND )
Make a local copy of \\ourdomain.org\sysvol\ourdomain.org\Policies\{31B2F340-016D-11D2-945F-00C04FB984F9}\Machine\Microsoft\Windows NT\SecEdit\GptTmpl.inf.
GPLinkDomain GPO_INFO_FLAG_BACKGROUND )
Process GP template gpt00000.inf.
This is not the last GPO.
-------------------------------------------
27 November 2007 08:33:43
Copy undo values to the merged policy.
----Un-initialize configuration engine...
Process GP template gpt00001.dom.
This is not the last GPO.
-------------------------------------------
27 November 2007 08:33:44
----Un-initialize configuration engine...
Process GP template gpt00002.dom.
-------------------------------------------
27 November 2007 08:33:44
----Configuration engine was initialized successfully.----
----Reading Configuration Template info...
----Configure General Service Settings...
Configure Messenger.
General Service configuration was completed successfully.
----Configure available attachment engines...
Configuration of attachment engines was completed successfully.
----Configure Security Policy...
Configure password information.
System Access configuration was completed successfully.
Audit/Log configuration was completed successfully.
Configure machine\software\microsoft\windows nt\currentversion\winlogon\passwordexpirywarning.
Configure machine\system\currentcontrolset\services\lanmanworkstation\parameters\requiresecuritysignature.
Configuration of Registry Values was completed successfully.
----Configure available attachment engines...
Configuration of attachment engines was completed successfully.
----Un-initialize configuration engine...
this is the last GPO.
**************************
Make a local copy of \\ourdomain.org\sysvol\ourdomain.org\Policies\{31B2F340-016D-11D2-945F-00C04FB984F9}\Machine\Microsoft\Windows NT\SecEdit\GptTmpl.inf.
GPLinkDomain GPO_INFO_FLAG_BACKGROUND )
Process GP template gpt00000.dom.
-------------------------------------------
27 November 2007 12:11:50
Copy undo values to the merged policy.
----Configuration engine was initialized successfully.----
----Reading Configuration Template info...
----Configure General Service Settings...
Configure Messenger.
General Service configuration was completed successfully.
----Configure available attachment engines...
Configuration of attachment engines was completed successfully.
----Configure Security Policy...
Configure password information.
System Access configuration was completed successfully.
Configure event audit settings.
Undo value for undefined group policy setting was reset successfully and removed.
Audit/Log configuration was completed successfully.
Configure machine\software\microsoft\windows nt\currentversion\winlogon\passwordexpirywarning.
Configure machine\system\currentcontrolset\services\lanmanworkstation\parameters\requiresecuritysignature.
Configuration of Registry Values was completed successfully.
----Configure available attachment engines...
Configuration of attachment engines was completed successfully.
----Un-initialize configuration engine...
this is the last GPO.
**************************
Make a local copy of \\ourdomain.org\sysvol\ourdomain.org\Policies\{31B2F340-016D-11D2-945F-00C04FB984F9}\Machine\Microsoft\Windows NT\SecEdit\GptTmpl.inf.
GPLinkDomain GPO_INFO_FLAG_BACKGROUND )
Process GP template gpt00000.dom.
-------------------------------------------
27 November 2007 14:07:50
Copy undo values to the merged policy.
----Configuration engine was initialized successfully.----
----Reading Configuration Template info...
----Configure General Service Settings...
Configure Messenger.
General Service configuration was completed successfully.
----Configure available attachment engines...
Configuration of attachment engines was completed successfully.
----Configure Security Policy...
Configure password information.
System Access configuration was completed successfully.
Audit/Log configuration was completed successfully.
Configure machine\software\microsoft\windows nt\currentversion\winlogon\passwordexpirywarning.
Configure machine\system\currentcontrolset\services\lanmanworkstation\parameters\requiresecuritysignature.
Configuration of Registry Values was completed successfully.
----Configure available attachment engines...
Configuration of attachment engines was completed successfully.
----Un-initialize configuration engine...
this is the last GPO.
**************************
Make a local copy of \\ourdomain.org\sysvol\ourdomain.org\Policies\{31B2F340-016D-11D2-945F-00C04FB984F9}\Machine\Microsoft\Windows NT\SecEdit\GptTmpl.inf.
GPLinkDomain GPO_INFO_FLAG_BACKGROUND )
Process GP template gpt00000.dom.
-------------------------------------------
28 November 2007 08:51:54
Copy undo values to the merged policy.
----Configuration engine was initialized successfully.----
----Reading Configuration Template info...
----Configure General Service Settings...
Configure Messenger.
General Service configuration was completed successfully.
----Configure available attachment engines...
Configuration of attachment engines was completed successfully.
----Configure Security Policy...
Configure password information.
System Access configuration was completed successfully.
Audit/Log configuration was completed successfully.
Configure machine\software\microsoft\windows nt\currentversion\winlogon\passwordexpirywarning.
Configure machine\system\currentcontrolset\services\lanmanworkstation\parameters\requiresecuritysignature.
Configuration of Registry Values was completed successfully.
----Configure available attachment engines...
Configuration of attachment engines was completed successfully.
----Un-initialize configuration engine...
this is the last GPO.
**************************
Make a local copy of \\ourdomain.org\sysvol\ourdomain.org\Policies\{31B2F340-016D-11D2-945F-00C04FB984F9}\Machine\Microsoft\Windows NT\SecEdit\GptTmpl.inf.
GPLinkDomain GPO_INFO_FLAG_BACKGROUND )
Process GP template gpt00000.dom.
-------------------------------------------
29 November 2007 08:28:01
Copy undo values to the merged policy.
----Configuration engine was initialized successfully.----
----Reading Configuration Template info...
----Configure General Service Settings...
Configure Messenger.
General Service configuration was completed successfully.
----Configure available attachment engines...
Configuration of attachment engines was completed successfully.
----Configure Security Policy...
Configure password information.
System Access configuration was completed successfully.
Audit/Log configuration was completed successfully.
Configure machine\software\microsoft\windows nt\currentversion\winlogon\passwordexpirywarning.
Configure machine\system\currentcontrolset\services\lanmanworkstation\parameters\requiresecuritysignature.
Configuration of Registry Values was completed successfully.
----Configure available attachment engines...
Configuration of attachment engines was completed successfully.
----Un-initialize configuration engine...
this is the last GPO.