Windows NT 4.0 server-based profiles should be stored in a dedicated profiles folder.
This dedicated folder should NOT be the user's home directory root, as this will download every file, resulting in very long logons.
The dedicated folder can be a sub-directory of the user's home directory.
The dedicated folder should NOT be the %SystemRoot%\Profiles folder, as this is used to store locally cached profiles.
The dedicated folder should NOT be the NetLogon share. When you implement your first BDC, you will begin to experience version problems. The exception to this is mandatory profiles, tip 0739.