you can disable internet using one of these
One way to remove the ability to browse with IE is to use XP's set program access and defaults utility.
1. Click on the Start button
2. Click on set program access and defaults
3. Select the Custom pull down list
4. Deselect the enable access to this program checkbox for Internet Explorer
5. Click ok
The second way is to add a bogus proxy server to IE's Internet Settings. Follow these steps:
1. In IE, go to Tools>>Internet Options.
2. On the Connections tab, click the LAN Settings button.
3. In the resulting dialog box, select the following check box in the Proxy Server section: Use a Proxy Server For Your LAN (These Settings Will Not Apply To Dial-up Or VPN Connections).
4. Enter 0.0.0.0 in the Address text box.
5. Enter 80 in the Port text box, and click OK.
As for that changing proxy thing with the implemtation of a patch that locks the proxys it is very secure. We use that to keep the shop union guys from messing around on the internet. While letting them access our own intranet.
User policies in XP can limit quite a bit, but you would probably need Windows Server to do everything you want to do without needing a 3rd-party app.
If you are doing this for fairly novice users, then removing shortcuts and Run from the Start Menu, and hiding My Computer and My Documents will probably be enough. The only icons you would want on the desktop are the Trash and Office icons. If IE isn't available in the Start Menu or desktop, then the user shouldn't be able to access it. If they happen to, you can add an extra measure of security by setting a false proxy server as Venom already mentioned.
Yep, local policy not group policy. Then again you could assign that specific user to one specific group and apply a group policy that way... making other users a part of another group with more freedom.
Ep, glad to see you come back and tidy up...did want to ask a one day favor, I want to enhance my resume , was hoping you could make me administrator for a day, if so, take me right off since I won't be here to do anything, and don't know the slightest about the board, but it would be nice putting "served administrator osnn", if can do, THANKS