The solution was painful simple
<add name="User" expression="R:"MyDomain\MyApp Users"" />
Question
I have a domain group with space in it, it does not work. The only related thing I find on google is this unanswered question
http://webclientguidance.codeplex.com/discussions/9242
<rules>
<add name="User" expression="R:MyDomain\MyApp Users" />
</rules>
I am getting this exception :
Found token "end of file" when expecting word at position 17.
Solution
The solution was painful simple
<add name="User" expression="R:"MyDomain\MyApp Users"" />