I found this great step-by-step guide for making a mapped drive in Active Directory for each user.  It covers both sets of permissions (share and security), and it covers all of the basic details for each section in AD.  Set up correctly this method even automagically creates each user folder as needed.  Very comprehensive.

However, there is one detail they never explicitly mention and which may cause you to stumble (as it did me).  They neglect to mention that you cannot use a trailing slash in your path or you will get an error when you try to Apply the new setting.

The specified path is not valid. Enter a valid network server path using the form: \\server\share\folder.

This error is not all that clear either.  Though it does not itself contain a trailing slash, I find it so common to use one when you are referring to a directory (thank you all other computing that’s not Microsoft) it seemed only natural to include one.  If you are reading this article then you probably also think nothing of using a trailing slash.

I don’t know for certain if this holds true still (in Server 2008 or SBS 2011), but it’s true in SBS 2003 (and presumably Server 2003).

In short don’t do this:

\\Server\Share\%username%\

Hope that helps you somewhere.