"Session Directory Computers" group is empty

The "Session Directory Computers" group is empty, you must add the computer accounts of Terminal Servers into this group for the Session Directory service to work properly. 

 

There are two different modes for terminal services:
Remote Administration Mode -- this requires no licenses, it allows administrators to log in and perform maintainance tasks remotely.
Application Mode -- this allows users to log in remotely and do work. This requires a license server, and a license for each user that connects.

In win2k3, installing "Terminal Services" installs application mode, which is what you have done. I would try running it in remote administration mode, which can be found under My Computer properties, in the Remote tab. The only restriction is the number of users that can log in.

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 Try uninstalling terminal services licensing.

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Remote administration mode was allready enabled when I had the terminal server installed. Anything else you can think of that might be the causing the problem? btw I uninstalled terminal services and the same thing still happens.
I also get a new warning message from TermServSessDir
The "Session Directory Computers" group is empty, you must add the computer accounts of Terminal Servers into this group for the Session Directory service to work properly.

I  still get the same thing. It started to log me on then it boots me right off.

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Are you running Active Directory on that box? If so, open up Active Directory Users and Computers from Administrative Tools and go to the Users OU. Find the group "Session Directory Computers", and add your computer to it. If you are not running AD, then I'm not sure. You can try adding your computer to the local group (in Computer Management / Local Users and Groups), but I don't think it'll let you outside of AD.   

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I am not running AD. I tried adding my computer to the local group like you said above but it wouldn't let me do it outside of AD. Anyway I fixed the problem. A simple Re-installation of remote desktop from the 2k3 cd fixed it. I installed sp1 for 2k3 a while ago and then I had about a month downtime with my comp while I rma'd my crappy koolance water cooled case. After that I got some danger den water block and I built my own watercooled rig. This is the first time I tried remote desktop since I installed sp1. Perhaps that messed something up?? Oh well Its fixed now. Thanks a lot for your time and your knowledge!!
P.S. looks like I spoke too soon, I used to be able to get in om my end now I can't, the same thing is happening, I alos have a friend who is running 2003 server and he is having the same problem with his. This is really ****ing ****ing me off. Does any one know if this is a common problem with 2003 server??
P.P.S Ok this time the problem is definetely fixed. It turned out being the NVIDIA display driver service. Once that was disabled, everything worked fine again. Totally wierd. Anyway Thanks a lot Electro and su root for your input!!