Neil, thank you for the example. That helped to better understand the problem. What I found is that the timephased information is accurate to the calendars (which you may already know). Carol physically takes 2 days to complete her task of 8 hours. The problem is the duration field itself. The duration is based on the physical duration of the work performed and the hours per day on the calendar tab of the project options.
Example: Task two has Carol assigned only and shows 1, 8 hour day (4 hours on day 1 and 4 on day 2). If you add Larry for 8 hours you get a duration of 1.5 days (one 8 hour day from Larry and a second 4 hour day). If you change Larry to 16 hours you get a duration of 2 days (8 hours each for two days). The calendar tab says to use 8 hours per day, which is what is being calculated.
I don’t have 2003 so I don’t know the difference between the two versions.