For some reason XP assigns the permission Create Folders/Append Data to the LocalMachine\Users group on the root of C:.

According to Microsoft:

Create Folders allows or denies creating folders within the folder (applies to folders only).

Append Data allows or denies making changes to the end of the file but not changing, deleting, or overwriting existing data (applies to files only).

Well, we definitely don't want our users creating folders in the root and the only reason I could see their accounts needing to append data would be to logfiles.

Has anyone else removed this permission set and if so, experienced adverse effects? Any thoughts as to why Microsoft set this in the first place?

In case you are wondering, their ability to create extra folders in the root of C allowed them to make folders such as C:\My Documents and C:\Stuff and basically have free reign over the system. It made it more difficult to back up their local files when it comes time to upgrade/replace/reimage their system. With tight control over where they can save personal files (Network Home Dir and C:\D&S\Username\My Documents ONLY) we can be certian we grabbed their personal files.

I hav only Read permisions on the root of C: on my workstation (and 5000 others here at work 2 ), for the same reasons you did mention.

and i can work fine.

you should be able to remove those rights, without a lot of troubles.

gr. /\/\o\/\/