I did some further digging at the HP website. I read some messages in a closed forum and found a document listing printers and their compatibility with Citrix XennApp and Terminal servers.
Definitely, getting a "better" printer will solve problem (thankscjcciv) . Due to limitations of the P1005 and manyh other recent low-cost HP printers, they are unsuitable for networking and terminal server use. This is b3cause these printers depend on "Host-based" software for driving the printer instead of an embedded processor in the printer.
For other readrs, get the real scoop in the followinmg document!
http://search.hp.com/redirect.html?type=REG&qt=HP+printers+citrix+terminal+services&url=http%3A//h20000.www2.hp.com/bc/docs/support/SupportManual/c01464949/c01464949.pdf%3Fjumpid%3Dreg_R1002_USEN&pos=1