Thanks for the reply..
I tried accessing the folder on a computer with no PGP netshare installed. No icons on the folder or the files, as you said that is normal. My account obviously has the AD group credentials to access that folder, when I opend the files in that folder they are not readable, meaning they are encrypted. So the funcionality is still working.
We created a new netshare folder using one of the XP machines effected by this icon issue. We added the proper users and group keys and it encrypted the folder with no problem. The folder never displayed the lock icon on it. I viewed that folder on my computer and I was able to see the PGP lock icon.
I also used the command line to verify the folder, everything seemed fine, all the keys are in place and the folder is indeed encrypted.
I have no idea what to do, we reinstalled the PGP netshare application three times already using three different versions. I made sure I removed all the appdata content and even removed the keys and created new ones, nothing seemed to help remedy the issue.