Ok with the help of some of the links I think I have narrowed the problem down. I think Win98 is loading the desktop before the script has time to put the shortcut on the desktop.
The reason I think this is that if I login as usual, I get no icon on the desktop. If I go to a command line and type kix32 test.kix. The icon appears. I read on a link to change the registry value for winlogon to 1 this is suppose to tell the system to run all the scripts before presenting the win98 desktop but I tried this and it did not work. Anyone else have an idea? I am having so much fun with this - I love this forum.
Kixtart v4.11
Servers Netware 5.1 and Win2K
Users running Netware and Win2k logon script
Users have Win98 workstations
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Stupid is forever - Ignorance can be fixed.