I added a win 7 prof machine to our windows 2003 domain. I added the domain admin to the local admin group, I also added a domain user to the local admin group. However, the domain users is unable to make changes to the machine such as UAC modifications, whereas the domain admin is. Why would this be? Thanks.

The domain admin, by default, has full control on a computer member of your domain. I recommand to you to check the groups that local administrator account is member of and give membership to all these groups for your domain user. Best regards.

The domain users is a member of the local admin group...but still has limited access. Could they also be members of another group that is limiting their access?

Normally if they are member of the local admin group all is okay. You can use groups to acquire more priviliges not to limit them. Find which groups is your local administrator member of and then make sure that your domain users are member of all these groups. Best regards.