If a user opens the printers they see all the printers for all sessions on the terminal server?
By default users should not see eachothers printers, they don't have the rights to. Did you add the users to the local Power users, or administrators group?
We had the same issue and it was precisely because all users were Power Users (darn those app developers who can't code correctly!). We ended up having to go to Screwdrivers to fix the problem. Users cannot see session printers from other sessions even as Power Users when everyone uses Screwdrivers. It is not a free fix though, so if you can lower their permissions.