Server 2003 SP2 (not R2) with 2 new Win 7 Pro workstations. Home Drive is set in AD (not GP) to map to \\server\users\username. Home Drive map fails, other network drives map correctly. No error logged on server or PC, Win 7 shows "Could not reconnect all network drives." There is no Y: (Home Drive) listed, either in the GUI or via Net Use.
Manual map via batch file in startup group with the same path works correctly? Home Drive map works correctly on XP workstations.
Check your permissions first and confirm that the users have appropriate rights to their home folders. You should also ensure that you have the "Bypass Traverse Checking" policy enabled.
I would recommend that you reconsider your use of the "home folder" property. At this stage it really only exists for legacy (NT4) backwards compatibility, and you should be moving to Folder Redirection (at the very least support for it may be removed in a future version).