Allowing users to install fonts in Windows 7 (through GPO)
So I figured it out.
Having looked at the Resultant Set Of Policy and seeing nothing untoward there, I checked C:\windows\security\logs\winlogon.txt
The Windows 7 client GPO is a copy of the standard XP one that I created, and therefore had entries in it to allow domain users to edit the content of C:\windows\fonts.
However, Windows 7 shows this in winlogon.txt:
----Configure File Security...
Configure c:\windows\fonts.
Warning 5: Access is denied.
Error setting security on c:\windows\fonts.
I checked the GPO and removed the settings for this directory and re-added it, which upon a GPO update and restart gave me this:
----Configure File Security...
Configure c:\windows\fonts.
Configure c:\windows\system32\fntcache.dat.
File Security configuration was completed successfully.
I tried adding a font and voila! Worked as intended.
Hope this helps anyone else who may come across the same issue. No idea why re-adding the same security setting made it work but it did.