I have to stop short of recommending doing the following, because I have no experience with doing this:
I wonder if it would be better, in the case where multiple Windows logons are present, to put each user's sandboxes underneath their own folders, such as underneath %USERPROFILE%

Everything below assumes XP, and I see that the %USERPROFILE% folders:
C:\Documents & Settings\Fast Eddie
C:\Documents & Settings\johnson
C:\Documents & Settings\Guest
already exist on the hard drive, for those Windows logons.

If the Sandboxie "Container Folder" was set to:
%USERPROFILE%\Sandbox\%SANDBOX%
then I would assume that there wouldn't be any problem with permissions for the folders, since each user's sandboxes would be underneath their own %USERPROFILE% folder.
For the "Fast Eddie" logon, that setting would put the "DefaultBox" sandbox at:
C:\Documents & Settings\Fast Eddie\Sandbox\DefaultBox
For the "johnson" logon, the "DefaultBox" sandbox would be located at:
C:\Documents & Settings\johnson\Sandbox\DefaultBox

This does make the paths a little bit longer to the files inside the sandboxes, than if the "Sandbox" folder is at the normal "C:\Sandbox" location. There was a time when the "Sandbox" folder was underneath the users (%AppData%, I think) folder, but was moved to "C:\Sandbox" to shorten the path to the sandbox files.

Just thinking ...

Guest10,

I may try this, and if I do, there is always Norton Ghost to recover from, if it does not work, or I do not like the new configuration.

Thanks.

mchain