WORKAROUND for "Error: The home folder for user "ActiveDirectoryUser" isn't located in the usual place or can't be accessed. The home or Users folder may have been moved or deleted. If the home...."
I was able to "Fix" the Mobile Account issue above in Lion -for now. (Valid as of 8/18/11 on Lion 10.7.1)
- In Directory Utility -> Active Directory -> Advanced Options, I unchecked "Create mobile account at login" and left "Force local home directory on startup disk" checked
- Log out then back in as a networked user, -A local home directory will be created under /Users but will not be accessible if network is offline (non-mobile)
- Open Terminal
--- Type: cd /System/Library/CoreServices/ManagedClient.app/Contents/Resources/
--- Type: ./createmobileaccount -n username
The username you specify with the createmobileaccount command will turn it from a standard account into a mobile account.
This fixes Active Directory mobile accounts for the time being so now its on to Open Directory which refuses to stay bound after a reboot.