“Home Folder Was Not Created” Error Message

My company has recently percussed a new server with server 2003 standard. AC has been installed and we are in the process of adding users, however, we can’t get the roaming user profiles working and when ever we try to set up a user home drive, we get this message “The username home folder was not created because you do not have create access on the server. The user account has been updated with the new home folder value but you must create the directory manually after obtaining the required access rights”.

Can someone shed some light on why this is happening and how to deal with it?