Hey Steven -
I've never seen this myself. A few suggestions, but I think this one has "open a support case" written all over it:
- Make sure you're on the latest/greatest version of Tableau Server
- See if the behavior is machine/browser specific - Have one of the users with problems try the same thing from YOUR machine running Chrome.
IE7 is the problem, the feature worked fine when I installed Chrome on one of the machines on which favorites didn't work.