The subject behavior may occur if the Windows XP or Windows Server 2003 computer cannot connect to a domain controller.

When Group Policy runs a logon script, it first forces the PATH variable to include the SYSVOL path, the %SystemRoot% folder, and the %SystemRoot%\System32 folder. If the computer fails to connect to a domain controller, the logon script in the SYSVOL cannot be located, causing the other folders listed in the PATH variable to be searched. If a file with the same name as the logon script is found, it is run.

You can use this behavior to run a different logon script when the domain cannot be contacted.