Hummmmm....
email address from college in Santa Barbara,
running Windows 98,
have movies and MP3s,
just a couple of users
How do you know that the files are from an "outside source" ? What happens if the files are removed (moved or deleted), do they or others reappear ? I assume the couple of users know nothing about how the the files got there and that they are connected to a college network.
I would first look for a P2P file sharing system like Napster, Gnutella, Morpheus, Kazaa, etc on those machines. Then check the settings of any instant messenger software (ICQ, AOL IM ,etc) to see if they have allowed file sharing and to where. Also see if the users have shared their drives locally. If that fails, blame it on the janitorialstaff. d:)
If you do find the any of the above, what you do about it will depend on whose machines they are: yours(the college) or theirs(the users).
The following link will give you a wealth of security, virus, exploit links plus security news.
http://www.infosyssec.com/infosyssec/index.shtml
PS: have fun
PPS: which movies/MP3s are showing up ? I may not have them yet.