Why you are making these changes? Have all of the user accounts already been created? Is this for a computer at home or work? The reason why I ask: there might be better ways to achieve the same goal... but we need to know what the entire goal is. I suggest that you not move forward with these changes until we have had a chance to discuss the reasons/goals behind doing so. If desired, you can send me a Private Message to discuss this.
You mentioned that the accounts involved are standard and admin. Making these changes means that an infection that strikes a standard user can now infect documents uses by an admin user... because all of the documents would be in the same folder. Also, the admin user might need to create a place to put documents that the admin does not want to be shared/seen by all other users. Doing that might not be as easy as it sounds.
Favorites can be shared by all via folder redirection.
Sorry, still novice. What is "folder redirection"?
See this tutorial:
http://www.sevenforums.com/tutorials/18629-user-folders-change-default-location.html
For your case, you would be moving C:\Users\
username\Documents to C:\Users\Public\Documents
You would repeat that move for each folder of interest.
(e.g. Downloads, Music...)
Do not redirect each user's Desktop folder to the Public Desktop folder. You would need to create a new folder to be the target (destination) of the move. Perhaps, C:\Desktop\
You should know that many folders have aliases.
(e.g.
C:\Users\
username\Documents
will appear as
C:\Users\
username\My Documents
at times.)
Apps can be set to point to those Public folders.
And sorry, how do I do that?
It would vary by app. Most apps should use the user's folders by default. (e.g. when downloading a file, it should be downloaded to the user's folder named Download. If you do the steps in the tutorial mentioned above for each user, then no further action within the app should be required. However, for apps that create there own folders, those might need to be changed via settings within the app or via hard links. Let's deal with that only if it happens.
Problems might arise if the user tells the app to download files to a non-standard location (e.g. C:\Data).
The C:\Data folder could be made available for each user to access, but each user would need to know that one user put files in there.
If you opt to redirect user folders to the Public folder structure as I have suggested, and later change your mind about doing this - you could use option two in this tutorial to but things back the way that they were:
http://www.sevenforums.com/tutorials/18583-user-folders-restore-default-location.html