Workgroup Manager & Parallels: does not launch

I cannot believe it, but I cannot find any posts in this forum that reference Workgroup Manager and Parallels.
Perhaps I am not searching in the right place.

I am using Leopard Server 10.5x, and Workgroup Manager. The clients are OS X 10.5.x.
I have installed Parallels build 5608 on the clients.
I have directed the VM to the /Users/Shared folder and updated permissions for all to read and write.
Applications are not being managed so users have rights to all apps on the local workstation.

Parallels works fine when logged in as the local machine admin, but when logging in as a network user,
Parallels will not launch. The application icon just bounces in the dock, and it never launches.

Has anyone run across this issue? Found a solution?

 

We have this issue, user profile (at least Documents folder should be located locally on Mac )