Disable Internet downloads

Have you considered upgrading you OS to either W2K or XP? Both have built-in features that will allow you to assign permissions to users.

In the Internet Explorer Options click on the Security Tab > Custom Level > Downloads > Disable.

Then you'll have to Hide the Internet Options icon that's in the control Panel (assuming your users are computer savvy) to prevent them from changing this option.
Hide Control Panel Applets:
This tweak allows you to show or hide any of the applets found in the Windows Control Panel.

Open CONTROL.INI (usually found in the C:\WINDOWS) and add the following lines under the "[don't load]" subsection. If the "[don't load]" section doesn't already exist then create it be adding it on a new line at the end of the file.
For each control panel applet to be hidden add a new line with text in the format "applet.cpl=no" (e.g. fax.cpl=no).

these might be the applets you want:

inetcpl.cpl - Internet Settings Applet
tweakui.cpl - TweakUI Applet

Exit and restart Windows for the change to take effect.

Now you must hide the tools menu in Internet Explorer so no one can get to the options from there:
Open Regedit or whatever registry editor you use.
Find or create the key: [HKEY_LOCAL_MACHINE\Software\Policies\Microsoft\Internet Explorer\
Restrictions]
and make the data type Reg_DWord= NoBrowserOptions and the value = 1

And Hide the IE icon on the desktop because you can get to the properties from there. (you could just delete it but you would have to delet it from each user that can logon.)

Open registry to this key or create it: [HKEY_LOCAL_MACHINE\Software\Microsoft\Windows\CurrentVersion\Policies\
Explorer]

Create a new DWORD value, or modify the existing value, called "NoInternetIcon" and set it to the value data = 0

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