A recent support note for Mac OS X Server advises that for compatibility admins avoid spaces and long names in the network home directory name and path.
To provide service to all types of clients, the complete pathname of a network home directory must not exceed 89 characters. This affects Apple Filing Protocol (AFP) and Network File System (NFS) home directories, for example.
If the absolute path from the client to the network home directory on the server contains more than 89 characters, certain types of clients cannot connect. For example, a client using automount with an LDAP-based AFP home directory may not be able to access its home directory.
However, if your site is exclusively running Mac OS X Snow Leopard clients and servers, then the path length limit is increased to 250 characters. However, the note warns that if there are any clients or servers running an earlier version, then the limit should be observed.
There are interesting differences in the allowed length for each major Mac OS X Server generation, mainly on the count of the mount path (some are longer or shorter). And the slash (called the solidus) counts as a character.
Mac OS X Server v10.5 and later support spaces in the full path unless Portable Home Directories are in use with mobile accounts. Mac OS X Server v10.4 and earlier do not support spaces in the full path.