Personally, while I do not like how some of the features are implemented, I like user profiles.
I could always find something wrong, but the degree of control it gives a administrator in a large network seems to me to be worth the hassle. I really like the fact that I can make a user see ONLY what I want them to see. Older programs and badly designed programs are what seems to make User Profiles difficult to deal with. Then you get into the argument of bad design of programs or bad design of OS?
If you need users to install applications you could always use published apps and the install elevated feature of Microsoft Win2k. There are also many third party programs designed exactly for user installs. Veritas WinInstall comes immediately to mind. ZenWorks I believe also does the same thing.
Roger