Catapult Systems upgrade was plagued by an unexpected behavior that was an artifact of a customization we made in 2003. The customization enabled sending a link to a document by e-mail from the Document Library drop down menu. The issue was caused by the upgrade process incorrectly setting the permissions on the folder when it is moved from the 60 hive to the 12 hive. After narrowing the issue to only upgraded sites the team further determined that the permissions on the "catapult" folder containing the customizations did not have the same permissions as the default images folder.

The solution was simple. We renamed the original folder and created a new catapult folder (which had the correct permissions applied by default). Then copied the files from the old folder to the new folder. Following an IISRESET the issue disappeared.