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what's to stop me from modifying the password files for the Administrator account using an NTAdmin recovery disk?
That was my point.... if the BIOS is set to only boot from the hard drive and has a setup password to prevent you from changing it, and the boot loader is set to zero delay, and the drive has an encrypted filesystem, and the case has a lock on it to prevent you from taking the cover off, how are you going to boot your recovery disk? I used to admin a couple of student labs in college, and this is exactly what I did with them.
Heck, if you were really paranoid you could yank the floppy and CD-ROM drives out completely once the box was configured. I promise you I can stop you from booting your recovery disk if I want to badly enough.
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I've always thought that one of Windows' biggest flaws was that they tried to take an environment that was built to be an individual desktop environment and make it a multi-user environment.
I agree completely. See my post on this very topic here.
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if you have physical access to the machine, you can reboot it and compromise any console security for just about every OS
And as I said, not if you configure everything properly. There are lots of ways to prevent this.
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I agree wholeheartedly, and that's exactly my point. You need to have a great deal of physical security to protect the console. It is one of the greatest vulnerabilities in your system.
There's a big difference between noticing some kid cutting the lock off the cover with a pair of bolt cutters, and somebody standing there watching every keystroke every user makes to be sure they don't run this shatter exploit from a floppy disk instead of that Comp 101 paper that's due in the morning. There's no comaprison, IMO.
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you might as well be giving out guest accounts!
I'd settle for guest accounts right now. As it stands, we're giving out administrator accounts.