There are 3 ways to deploy printers via GPO:

1. logon script using net use commands
2. Group Policy Deployed printers
3. Group Policy Preferences

When deploying printers in user context it is important to use Run in logged-on user’s security context (user policy option) This solves error

The user ‘Printer′ preference item in the ‘Printers GPO’ Group Policy object did not apply because it failed with error code ‘0x80070005 Access is denied.’ This error was suppressed.

If the Run in logged-on user's security context option is selected, it changes the security context under which the preference item is processed. The preference extension processes preference items in the security context of the logged-on user. This allows the preference extension to access resources as the user rather than the computer. This can be especially important when using drive maps or other preferences in which the computer may not have permissions to resources or when using environment variables. The value of many environment variables differs when evaluated in a security context other than the logged-on user.

– http://technet.microsoft.com/en-us/library/cc772371.aspx

Also is useful allow regular users installation of printer drivers using GPO in Computer Configuration → Policies → Windows Settings → Security Settings → Local Policies → Security Options key Devices: Prevent users from installing printer drivers to Disabled

Source:

• http://dxpetti.com/blog/?p=181
• http://deployhappiness.com/run-in-logged-on-users-security-context/