My offline files in windows 7 do not Sync the first time I set it up.

I am using a Windows 7 Enterprise 32bit, linking to a network drive on a Windows 2003 Small Business server. All user folders are marked for offline use and correct permission are on all folders. (user can access data through the network and from Vista/XP machines) The problem is windows 7 does not sync initially with my files and subfolders, I need to open each and every file before windows 7 makes them available offline. Has anybody else found this Issue? Does my Server 2003 need an update?