Users favourite reports are stored locally and the sage software must log these reports somewhere. Browsing to the favourites folder on each user one can see the reports that have been favourited. These reports however cannot be copied to another users favourites folder, instead the new user must add these reports one by one within the sage software.
The nasty hack is that once you've copied the report link files over to another Windwos user's .../Favourites directory, you also need to update that Windwos user's FavOrder.xml file also in their ...\Favourites directory - it lists the reports that have been marked as favourites as per the files in that directory.