What happens in a Windows Domain, if you’re not using roaming profiles, is that when a domain user logs onto a workstation for the first time, a folder is created for that user in Documents and Settings.
The folder name will be their username, however if a folder already exists with that name, the new folder will instead be called username.domain
The same is also true the other way around; if a local user logs onto a workstation where there is already a folder called their username, their profile folder will become username.workstation or maybe username.000
If you opt to use roaming profiles, then each users profile is actually stored on the server (or other network location) and downloaded to their workstation each time they log on. This of course is useful because they can get their personal documents/settings whichever machine they log onto, but depending on the size of their folder could take a long time to come down on each logon.
In the same way that you specificy a folder for a roaming profile, you could specify a local folder using %systemdrive%\documents and settings\folder name
A users profile can also be changed on each workstation in regedit under HKEY_LOCAL_MACHINE\Software\Microsoft\Windows
Using either method you could have a domain and a local user’s profiles both pointing to the same location which may help in what you are trying to achieve.
Whatever you are doing, make sure you give domain users local admin rights