The resolution for this is rather asinine.

A library consists of several folders that have been added to the library so you can view them as one entity. So if you have three folders added to the library, it'll show all of the files within those folders. You can modify what folders the library uses by right clicking on that particular library and going to properties.

Now, to change the default FOLDER that DOCUMENTS is pointed to, you'll have to go to the physical location of the DOCUMENTS folder, NOT THE LIBRARY > DOCUMENTS folder. This means, open up COMPUTER > C: Drive > USERS > %USERNAME and there should be the documents folder under your username's folder.

If you right click the DOCUMENTS folder and choose Properties, you'll have a location tab under the properties of that folder. THAT is where you set the actual physical location of the Documents folder.

Windows 7 and Vista totally hosed that for network administrators. Because people will have no clue what the F a library is, compared to a folder. Most people still think that documents are IN THE APPLICATION and not located on some drive somewhere. Whoever came up with that GENIUS "library" thought should get a friggin' medal for making things even more obscured for non-computer users. Bravo M$! Way to think about usability.