Disabling Program option in Start menu

Navigate your windows explorer (as an administrator) to:

C:\Documents and Settings\All Users\Start Menu\ and make the Programs group hidden.

I know of Registry hacks that will remove Run, Shut Down, Find, Control Panel, Printers, and there are already options to show/remove Favorites and Log Off.
If you did all of these things, it would leave you with Help (which you can't remove, but you can change the .HLP file it uses), Settings (with only Network & Dial Up Connections left), and Programs.
As far as I know, you can't remove Programs from the Start Menu.

Now, there IS a Registry hack that will remove the entire contents of the All Users Start Menu profile for showing up. So, if you are trying to remove programs that are installed in the All Users directory structure, so that (like the name says) all users get them, this hack will prevent them from showing up:
Use Regedt32 and go to HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Policies\Explorer
Create a new value called: NoCommonGroups
Type: REG_DWORD
Make it equal 1

Reboot.

Now, for the program links in the individual users folders, you could just delete all folders under the users Start Menu folder.
You could set up a command in a logon script to do that fairly easily.

Say user BOB logs in. His logon script runs.
You put this line in his logon script:

deltree /Y "c:\documents and settings\%username%\start menu\programs"

That should take care of it. Programs would still be on the Start Menu, but there wouldn't be anything there.

Hope this helps.