Getting closer
EDIT I guess you will have to cut and paste, the parenthesis seems to have broken the link.
Just found the following on TechNet regarding the use of the System Policy Editor
Figure B Delete the shortcut to any program you don't want the normal user to be able to access.
Next, go to the \Windows\Profiles\Normal\Recent folder. As you can see in Figure C, this folder contains a list of all the recently opened documents. If this folder is left unchecked, the normal user could double-click on a recently opened document and gain access to a restricted program. For example, suppose you removed the shortcut to Microsoft Excel. If Excel worksheets appeared in the recently opened documents folder, the user could double-click on the worksheet and Windows would open Excel. From there, the user could simply close the document while leaving Excel open and do anything he wanted. Therefore, it's important to delete the entire contents of the Recent folder.
Is there any indication that System Policy Editor was used in this fashion?
And speaking of policies, is there any folder redirection policy?