In the The Good, the Bad, and the Ugly of SP1 I mentioned this:
There are some MIT cross realm trust issues when logging in via Terminal Services – if you think you are hitting this then ping me. Reason, I havent had time to fully look into it, but it appears the reg value “IgnoreRegUserConfigErrors” noted here http://support.microsoft.com/?kbid=815266 resolves this one.
After applying Service Pack 1 for Windows 2003 users from trusted MIT Kerberos V5 realm cannot termserv into the Windows 2003 SP1 TS server using UPN. When trying to TS into the server users get an error “domain either does not exist to could not contacted”.
This has been fixed and will be available in fix KB902336.