Folder redirection is used to centrally store a user's documents in a network location that would otherwise be located only on their individual client machine. "In SBS environments, admins use folder redirection as a convenient method to store this info on the server to be included in normal SBS backup rotation. Both SBS 2003 and SBS 2008 use Group Policy to accomplish this; however they differ significantly in their method. While SBS 2003 links a folder redirection GPO at domain level and applies to all authenticated users, SBS 2008 links its GPO at SBSUsers Organization Unit and includes only specific users you assign to it through SBS console," explained SBS team.
Below is the SBS 2003 Small Business Server Folder Redirection GPO created when you configure folder redirection in Server Management Console and is deleted when you disable it.