[southwell]

With our environment I have enabled offline files with the %username% function as specified above, but i do not redirect documents. One main reason is certain installers like 3g dongles, etc, want My Documents to be the C: drive.
Instead i setup Shlib.exe (a download can be found, run with switches) to add the network path of the users home drive to the Library area, then default all open/save commands from Office, etc, to default to there.
You keep your C: My Documents, and users don't tend to see it.
Hope this makes sense, i can post snippets of my GPO's if needed.