I just solved this same problem on my home network last night. The default domain User group seems to be restricted user. This is fine, except for certain network functions and also the fact that my users object strongly when they can't download and install "stuff"!! Ah well...
Rather than changing the default permisions setup on the SME Server, I changed the user's permissions on the W2K box. Try: Log on as the Administrator and do the following: Start > Settings > Control Panel > Users and Passwords > Add > Browse at which point you can select the User you wish to setup on the machine. The final setup screen will allow you to set the users permissions.
This will allow you to control the user permissions, on each network client. I find this to be a wise default thereby limiting stronger permissions to those individuals and machines that I take specfic action on. Roaming profiles are nice, but can bugger up the network if you are not careful.
By the way, I have the SME Admin user setup to be a Domain Administrator. It simplifies admin tasks.
Good Luck.