Issue resolved, so this is what you've gotta do if your setting up an alf_data network share:
I'm running on Windows Server 2008 Ent R2
1. Edit alfresco-global.properites located in: c:\alfresco\tomcat\shared\classes
Use this:
dir.root=C:/Alfresco/alf_data
dir.contentstore=\\\\FQDN-GOES-HERE\\Alfresco\\contentstore
dir.contentstore.deleted=\\\\FQDN-GOES-HERE\\Alfresco\\contentstore.deleted
Yes, make sure the slashes are doubled on network locations, it has to do with the way tomcat parses them.
Also note dir.root is still on your tomcat server, you want it to be like this as you want lucene index to run locally for performance purposes.
2. Make your network share, set permissions, in my case, I shared it with domain administrator only.
3. On the server running tomcat, go Start > 'Run' > services.msc
Find 'Apache Tomcat alfrescoTomcat' and open up the properties.
Goto the 'Log On' tab, change from 'local system account' to 'this account'.
Enter your domain administrator credentials here, or what ever share permission you set back on the file server.
4. Stop the tomcat server
5. Delete your current alf_data (you only need to delete cotentstore and contentstore.deleted)
6. Delete your database
7. Start the tomcat server, it should now recreate database, and create new contentstore and contentstore.deleted on the file server.