We have a custom form published to the Organizational Forms folder and set
NOT to send the form definition.
The form works fine for most of us but we have found some users that the
code will not execute for.
The problem exists the first time they open the form before it is ever even
sent.

One thing we noticed, testing the form on a persons device nearby, when they
opened the form for the first time it gave a message indicating it was
installing the form on the client's machine. Is it somehow pulling this
form down to their computer and thereby turning into a one-off form rather
than executing it from the original location?

And why would this happen to some users and not others?

All clients are using Outlook 2003 and our servers are Exchange 2003. We
have multiple servers in the environment and it is possible the ones having
the problem are connecting through a different server.
We have made sure to clear the forms cache for the client and the
Organizational folder but nothing seems to work.

Any ideas?