I have a small network that has Small Busines Server 2003 R2 as the server, and the desktop computers are having the My Documents folders redirected to the server. The server is then backed up regularly.

My question is:
If a computer has to be replaced, how does the user recover their My Document files to their new computer, or do they need to? I am not sure how the reovery works especially when the user logs off and the My Documents files are synched? Are the users files unaffected? or does the network download the files when they log on?

where are the users files stored, are they stored on the users PC or on the server. if they are stored on the local pc back up to either a flash,cd or on the network then replace the pc then you can restore the files from the back up area

That's where I get confused, I guess they are on the server, but maybe they start out on the users computer and are synched with the servers copy when logging off. So originally, they would be on the users. Once they computer gets replaced, then they would be from the server, does that make sense?

does make sense. and if what you are saying the document are sync between the server and the pc, the same thing would happen if you replace the pc the document on the server would be sync to the persons pc when it is replace. or you can just copy from the server to the pc

I'd say the documents are kept on the serve only unless you have enabled offline files option.
If your using AD for user to login then you dont need to worry about the PC, because AD will redirect the users to there home directory(my documents) where ever in the network they login.

Thanks guys, I appreciate the feed back!!
I am not sure if offline files are default or not, but occasionally, there is a window popup that states, there was an error in synching the files and if I want to keep both versions and/or keep one or the other.
Either way, I feel safer keeping both till the next time. That's what prompted me to inquire.