Print spooler problem on server 2003

We have windows server 2003. We are using Thin Client environment.
After installing third party software for terminal service, we notice that printer list is empty & after clicking on "Add Printer" it gives error that "Operation could not completed" & error log shows error no 7031 -- Print spooler service stops & after few seconds this service start automatically.

Kindly help me to resolve this.

THanks in advance