bubarooni, I came across this problem myself yesterday.
If you have a local printer on something other than an LPT, USB or COM port you will need a reg hack:
(obviously the usual applies, back up your registry before making any changes, I cannot accept any responsibility for your changes etc, etc)
Find your way through to:
HKCU > Software > Microsoft > Terminal Server Client > Default > AddIns > RDPDR
add a new DWORD & name it:
FilterQueueType
set the Value as:
FFFFFFFF (Hexadecimal)
Hope this helps
Andrew