Usng that Group Policy setting (its name has changed over the years, depending on the Service Pack level of the ADM files... in an XP SP3 machine here I'm seeing it called "Allow users to connect remotely using Terminal Services") has been the standard way I've forced Terminal Servers to listen for connections on computers.
You don't give enough detail about the problems you're seeing.
The Windows Firewall may be preventing connections.
Assuming you are getting connected but receiving an error message about access permission the affected user probably isn't in the "Remote Desktop Users" group. You can use the "Restricted Groups" functionality in Group Policy to modify the group membership automatically.
Sometimes I see the symptoms described in this article when connecting to Windows XP machines, as well. (The client gets "The terminal Server has ended the connection." and the server machine logs "The RDP protocol component "DATA ENCRYPTION" detected an error in the protocol stream and has disconnected the client." in its event log.)