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Squid is a nice feature and so is ISA listed above. If your that strong about going and doing this Cisco is the way to go. And very few HP switch's can do it as well. Find a few older managable Cisco's and block down the ports to match the mac's along with DHCP tied to mac. It is still possible to spoof the mac but it makes for a much tighter and easier setup for the future.

Also get them out of the Admin group there should be no way for them to change there local address. Prehibit the use of personal laptops as well make users sign an aggrement saying they wont bring one in.