This is happening on all groups, with or without spaces.  I performed an uninstall through the portal interface and did an re-install of 1.00.03 using the interface. 

You are correct, the groups are not being pulled when the users sign in.  As a test, I added a new group that we have in AD in the portal, with myself being a member of it in AD.  I left "sync roles" on and logged out and back in.  When I checked the group for members, I was not in there.  When I create a group in the portal named "Domain Users" one test account that I use gets put into the group, another one does not.  No strange errors in the event viewer.

I will take a look at LDAP Browser, but what exactly will this tell me?

Anything is possible I guess.  I just did another test, though, and this is what I found...

With the old provider, when a new user logs in for the first time, it throws that error and it appears as if the user account is not created, when in fact it was.  It also adds that user to all the groups that match what it finds in AD and the portal.  (I can live with that for now)

Existing users with the old provider sometimes do get put in, sometimes not, automatically.  Again, in some cases they are removed from the matching groups.  It looks as if users that are members of more groups in AD have the hang up.   I'm in 38 groups in AD and it is not adding me.  The test account that I'm using is only a member of 10 groups and that works great.  Is that a known issue?