gpedit.msc/mmc not working - help

Hey folks, this is a strange one. I am trying to set a local policy on a few machines in a domain. I want to restrict several things users can't do, e.g., run the command line, change control pannel settings, etc.

When I run gpedit.msc and change what I want, it only changes these items for the administrator account. If I log into the computer as a user, it does not restrict me. This is happening on two different machines with xp pro and a clean install. I have used this before without any issues.

I have also tried to use mmc with the same results.

Any help is appreciated!