Can't really help with C: drive (there is a disable option but it wipes out way to much to keep the computer useful) but you should be able to lock down the served apps folders a bit more tightly. At our school we also have a number of served apps that require modify access, but it is usually to only 1 or 2 files for records or scores etc.(eg. Phonics Typing is completely read only except for the file 'results.mdb')
We have created a "Swap Folder" as a place for students to share files (and for us to monitor). It doesn't really stop the problem but at least gets it off the desktop C: drives.
If you have per user profiles then a right click on an unwanted file then properties, security, will show up who pasted it there. Busted!!!
Using start, search, file, then specifying *.exe, *.zip, *.wav etc then browsing to your suspect areas will quickly reveal what (and from above) who has dumped stuff there. Block the student from internet, mail or the whole network for a few days etc.(assumes per user accounts)
As a draconian measure you could halt their access to these files by:
1. Removing the cdroms (floppies are 2 small for most music and games but still handy for other stuff)
2. Filtering the web with something like "Surf Control" and blocking by url excpetion *.mp3 etc
3. Get RIS working sweetly and do a reload round the school so that the desktops are 'cleaned' (1 a day maybe).
Unfortunately it is sort of like graffitti and the only way to slow it is to get rid of it as fast as it appears (yeah I know... time!).
Good luck in the struggle with 100's of potential hackers, sorry; 'students', inside your network.
John
Broome SHS
Australia