In Microsoft Windows, the System Volume (Sysvol) is a shared directory that stores the server copy of the domain’s public files that must be shared for common access and replication throughout a domain. The term SYSVOL refers to a set of files and folders that reside on the local hard disk of each domain controller in a domain and that are replicated by the File Replication service (FRS). Network clients access the contents of the SYSVOL tree by using the NETLOGON and SYSVOL shared folders. Sysvol uses junction points–a physical location on a hard disk that points to data that is located elsewhere on your disk or other storage device–to manage a single instance store.
See “Best Practices for Sysvol Maintenance” from Microsoft Help and Support.
See also “Win Server 2008 Directory Services, SYSVOL DFS Replication” on ServerWatch.com.