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I see this question fairly often in the DFS_FRS newsgroup. A customer will be setting up a new namespace and wonders whether he needs to move a bunch of shares under the root folder. The answer is simple: don’t use the root folder for storage. Keep your shares elsewhere and create folders in the namespace (aka links) that point to those shares. The Distributed File System service will create its own structures under the root, but there is no need for you to store files and folders there.
Okay, you've said that there is no need to store files and folders there. My question is, is there a reason NOT to store files and folders there.
We are designing a DFS architecture where we plan to create a domain DFS root for each user... the root share will be their home directory... in a subdirectory, we will create DFS links to other shares that the user has access to. One of the advantages to having the users home directory files and folders stored directly in that DFS root folder is that we hope to use Windows 2003 R2 folder based quotas and we would like the quota to be reflected in the clients explorer window (if the quota is associated with a subdirectory of the share, explorer doesn't reflect the available free space accurately).
One drawback to storing files/folders in the root is the fact that you can't take individual root targets offline (i.e., disable their referrals), whereas you can take individual link targets offline.
Also, the R2 DFS Mgmt snap-in does not offer a way to replicate the root folders of a namespace. You have to do this manually by setting up a replication group w/replicated folders that correspond to the root folders.
Finally, if you ever plan to add a link to that root, you should not name it the same name as an existing subfolder under the root. This limitation exists because DFS creates a subfolder under the root that corresponds to the link name. This subfolder is actually a reparse point that, when accessed remotely, redirects users to the remote target. I believe if a folder with the link name already exists, DFS will rename that existing folder (by appending text) and then create a new folder using the link name.