Folder Redirection Causes Installation problems for other programs

I've setup my users with a network drive "W:\" that keeps their data files.
This drive is mapped using the profile setting in Active Directory. I then
redirect the "Documents" folder to w:\documents on their local machiine.
That's all fine and good, but here's the problem.

When Installing software I get this error:
Error Invalid Drive "W:\"

I've tried installing two different programs, (PalmOne Desktop) and
(Libronix DLS LOGOS) both give the exact same error.

When I change the documents folder back to it's normal location the programs
install fine.

Am I redirecting improperly, or is the Folder redirection in Vista not very
good at being "transparent" to program installations? I didn't have this
problem with XP using the same setup.