"This network location can't be included because it is not indexed." - error when connecting to indexed location on Windows Server 2003

I am trying to link Windows 7 x86 RTM libraries to remote shares on a server and it's not working.

The remote computer is running Windows Server 2003 x64 with Windows Desktop Search 4.0 installed, and the shares I want to use are indexed.

When I try to include certain folders, I get the error : "This network location can't be included because it is not indexed"

The server is setup like this:

1. Windows Search Includes location "c:\data" and all subdirectories
2. I have a share at c:\data called "\\server\data"
3. I have a share on a subdirectory at c:\data\documents\pete called "\\server\pete".  These directories are indexed by the location set in step 1
4. Connecting the client library at "\\server\data" works properly
5. Connecting the client library to "\\server\pete" gives the error message "This network location can't be included because it is not indexed."

I have tried to setup a new index location at c:\data\documents\pete but I get the same error.

What gives?

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Pete