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I've seen this solution used by many public institutions for their terminals available to the public. Libraries and such often provide only a desktop with a non-modifiable shortcut to the A: drive and perhaps a shortcut to Internet Explorer, and maybe the printer. They then can lock off access to the harddrives except for one folder -- the desktop. You can save information to the desktop or the A: drive, and that's it. You can even deny the ability to save at all.
well, i agree that techniques similar to this are often used, but most of the time they can be broken fairly quickly by a dedicated individual.