Generally, this is a rights error. GP 10 uses that location to store the current menu mapping (which menus are expanded/contracted) for a user and must be able to delete, read, and write to that folder for the user.
We are using GP in a Citrix environment. 5 servers in the farm.
This error does not always occur. It is inconsistent. And right now only 2 users are getting it.
Does this error relate to the home page in GP?
I recently had that error in a test environment. I tracked the error down to the point when the charts were being loading on the home page.
I installed Office Web Components 2003 and viola! No more errors.
It's a quick install that doesn't require a restart.
Hope that helps.