Multiple Thumb Drives and Install Rights

I am in a similar situation. Our workstations have recently been upgraded to XP (from 98se) and the security settings are set very high. We also have various presenters who have their presentations on "thumb drives". Two problems arise. Our network is setup so that if you do not have an ID setup, you cannot log in as a guest... no ID = NO ACCESS. So rather than make all of our guests register and wait for an ID, we decided that the easiest method to deal with "outsiders", was to purchase a basic laptop and projector for them to run their presentations with. I picked up a Toshiba laptop on sale for $800. When a guest comes to our facility and wants to use the laptop/projector (or any other hardware), they have to sign it out.
I know this probably wasn't the answer you were looking for, but letting "outsiders" have access to a secure network is scarey, even if it is limited access.
I also run a small (22PCs) LAN here for public access. All the machines are P4/2.6C boxes with XP professional installed. I've set up the public accounts with basic privledges and have seen "the public" use thumb flash drives in these machines without issue. Of course I also have Deep Freeze loaded on these publically accessed machines so after a reboot, the PCs are back to the "way they were", before John Q. Public fubar'd them up.

If I remember this right: It should allow anyone who logs in from the keyboard (interactive user)to load a thumb drive.

Run secpol.msc
Security Settings
Security Options

Devices: Allowed to format and eject removable media == Administrators and interactive users