Blue screen/partial login on 2003 Terminal server

I have a Windows 2003 terminal server and sometimes when I login with a
regular user account it only logs in partially and I just get a blue screen
and I can only see the mouse. It only does it part of the time. Sometimes
it works just fine.

For example, if I login, logoff and try to log right back in,it seems to do
that. If I logoff the user from the Terminal services manager and try to
login, the same problem, sometimes it seems to clear it, sometimes not.

If I login with the admin account it works just fine. I've tried it with
other user accounts and still the same. I've tried to delete the user
account and re-create it and still the same problem.

I've heard that it may have something to do with Group Policies but I'm not
sure what.