Local Folder access

SBS 2003, client Windows XP Pro SP1

The client pc was setup on a workgroup then added to the domain.

Originally my problem began with running a program as any other user other
than the local administrator. The folder where the software is located is
shared with full control permissions for everyone as the software vendor
instructed. The Domain Admin could not run the program, locally. Adding
the Domain Admin to the user list locally did not work either. That got me
thinking the GP has something to do with it, the computer just doesn't know
that the domain admin is the same as the local admin. Or that a local
policy has the override on the group policy, however there are no defined
local policies, other than the user groups. So, I removed the
computer from the network on the server and then added it back. No luck.
I've changed the name of the computer, created a new computer account and
added it back with no luck either.

Then only to confuse things further I logged in using Terminal Services with
any user with Terminal Services privileges. The program ran just fine. Or
if I right click on the desktop icon for the program then selected run as..
and used the local admins credentials it ran just fine.

I don't have any really strict domain policies in place, in fact I think
they are the standard out of the box policies. I've turned off the group
policies and tried it, still no luck.
I have a copy of the Group Policy Results Query should anyone need it.

I'm on the verge of going bald pulling my hair out. Any one have any ideas
or experience this before?

Robert