I've followed the instructions at the end of the slim OS X Server manual (the installation and setup one) which explains how to configure a very basic client/server relationship in a classroom (student directories kept on server and accessible from numerous client Macs). The directories were specified to be created "At: NetInfo/root/". (If memory serves.) Clicking on the various users gives me an account summary acknowledging the existence of the user's home directory.
I've achieved partial success in this effort: From a client Mac, I can log in using a name and password to an account housed on our Xserve. However, I get the error dialog "The 'Home' folder for this account was not found in the usual location". (Consequently, the custom Dock and Finder settings I'd made for these accounts aren't read, and I get the default OS X stuff.)
Back at the Xserve, I notice that for every account I've logged into, a Home folder has been created in the Users folder; those that haven't been accessed yet (but were merely created in Workgroup Manager app), had no associated home folders. (Re-logging into one of the previous accounts still gives me a Home-folder-not-in-usual-location error.)
What's up with that?