hi there JD12, I also work with domains and use kixtart as a login script. I have actually spent the last few months completing rebuilding my script to make it 100% compatiblie with Windows 7 and Server 2008 standard. I remember having the same problem that you have and if memory serves me correctly the problem was caused by the drives being mapped persistently. But I cannot remember for sure, so what I will do is give you the coding that I use and the steps that I have taken in my new script as I don't have this issue in the new script.

1. Run the script from the group policy. I used to in the old days run my script from the netlogon folder. This causes a lot of issues with windows 7. You need to run it from a gpo.
2. Use the latest kixtart script as this take into account any changes with windows 7.
3. When calling from a gpo you need to call the file kix32.exe and you need to specify that you are calling the kixtart.kix script otherwise it does not run. this issue is specific to the latest version of kixtart. I did not have this issue with earlier versions. It used to just run kixtart.kix without me having to specify the file to be called.
4.Do not use persistent drives (as I think that this was the cause when I had the problem). To ensure that you don't have persistent drives, disable your script, logoff and logon again. If the drives are still there, you have a persistent setting somewhere.
try looking in the registry setting

("HKEY_CURRENT_USER\Software\Microsoft\Windows NT\CurrentVersion\Network\Persistent Connections", "SaveConnections", "No","REG_SZ")

5. I had an issue with windows 7 not mapping the drives at all, if I run it from the gpo. It worked perfectly if I ran the script manually while logged on, but it did not work when the script ran on login. You need to add the following code for windows 7

("HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Policies\System", "EnableLinkedConnections", "1", "REG_DWORD")

I also found that sometimes settings were not being applied consistently and I came to the conclusion that the script was writing settings to the registry before the user key was loaded, so the settings were not being applied. To correct this, I told the script to wait till the user ID was loaded, then continue loading the script. I don't believe that this is causing your problem, but it may be worth your while to add. Put this right at the beginning of your script, so that it will wait for the User ID to be loaded then run your script.

? "User logged on is " @Userid
@USERID = ""
sleep 300
? "sleeping for 300 milliseconds"

You may have a problem with your network card drivers. Try updating to the latest version as you may have an issue where the network card driver seems to lose the connection. I had this and I had to change from version 6.00 to version 6.20 for the realteak card, but I had to manually select the driver rather than have windows choose my driver. I doubt that is your problem, because you are obviously having the issue where the x appears straight on login, but its always worthwhile to update the network card drivers.

I believe that your problem is that your drives are set to be persistent. With regards to your script, if you do not have persistent drives, there is no need to delete the drives at all. when you logoff the drives will automatically be deleted. so get rid of the part of your script where you are deleting the mapped drives as this is not required.
Hope that my answer helps somewhat