You have to make sure that all users/computers you want to apply that policy should be in the specified OU.
You should do that -> asigning GPOs <- from the server, not from your machine, as you don't have a proper MMC console on it to display the services on the server, not on the desktop computer. This can be done, but you should check in the technet about "customized MMC console" and "taskpads". This is going to give you the answer about the GPMC that is not performing the installation on your desktop computer.
About the rest, how you should configure users/computer rights within the GPO, I don't think you need more instructions. As for now, just remember - computer policies are applied once (when starting/rebooting the computer), and the users policies are applied everytime a user logs on the network from any computer he might use. It's like a "follow-me red car" when you apply GPOs at the user level.