Consensus Says They Don't
>Of course Windows allows separation of data and programs - how would roaming profiles work if not?
Search the web, the general consensus is that roaming profiles don't work any more.
I've been running roaming profiles since WinNT and with each version of Windows (2k, XP, Server 2003, etc) it becomes more and more of a struggle. Profiles are now so bloated I've heard of people in other shops talk about logins taking 25 minutes - over 1Gb LAN. I've personally seen an XP+2003 combination take 5 minutes to login and that's with less than 50M payload. Adobe Reader (circa 7,8, haven't used it since) installs its 100M setup file into a roaming profile folder and then attempts to infect any computer you log in to.
The registry is the number one place MS screwed the pooch with regard to backup/restore, its monolithic (or dualistic?, tri...) nature and its inability to fail gracefully doom most attempts to restore software - settings are spewed all across HKLM, HKCR and HKLU and some .ini and .dat files in 3-4 different profile folders, some roaming some not.
I've seen some well written apps that, when started, will inform the user that settings have been lost and offer to recreate them. Far too many follow the MS Office example: "Tahoma Font not found, try reinstalling the application!"