I am the administrator on a Vista Home Premium laptop. I set it up so that anyone can use this computer just to test this...when I see a folder that has a short cut arrow on it and I click on it, it gives me the access denied popup. can anyone tell me why this is happening?

Those folders are not shortcuts.
Even though you did not mention the name of the folder, this is a common problem with folks who are not familiar with Vista. You are trying to open a folder that you used previously in XP.
The folders you are looking at that appear to be have a shortcut arrow are called Junctions or Symbolic Links. These folders are only used for backward compatibility, mostly for older installation programs that are looking for an old system folder location. They appear where a system folder location, that was part of a previous version of Windows, (like XP) has been changed in Vista. When an older installation program is installed, these folders will redirect the installation program to the proper folder in Vista. These folders contain no user information.
You can use a command prompt to locate the new folder that the Junction points to.
Go to Start and type cmd and click the cmd.exe program.
The command window should open at C:\Users\<username>.
Type dir /AHL and press the ENTER key. (Note the space in the command)
The result will be a list of folders on the C: drive.
A typical line will look like this:
<date> <time> <JUNCTION> SendTo [C:\Users\<username>\AppData\Roaming\Microsoft\Windows\SendTo]
This shows that the information for the old Send To folder is now contained in the folder that the path points to in the brackets. You should see all of the junction points with the old name of the folder and the new location for that folder in Vista.

Ronnie Vernon Microsoft MVP Windows Shell/User
"jbrad2"

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