With the pending need to either replace XP machines or limit their network access, I spent a decent amount of time setting Group Policy that sets the proxy settings for Internet Explorer and preventing the user from making changes after the fact. The proxy being enabled, the overrides, and turning on the proxy was all done via User Configuration => Preferences => Windows Components => Registry. They were set as Replace actions in the Software\Microsoft\Windows\CurrentVersion\Internet Settings Key Path for the Current User hive.
The problem is that this works as a user policy if the user is a domain user but if the computer is a lab computer with software that was originally configured as a local user, the policies do not apply. This has to be set up as a Computer policy versus the user policy but when done so, they do not apply. Doesn't matter if the user logging in is domain or local, this does not work as a computer policy and I've tried changing the hive to local computer rather than current user.
I've tried doing this as a user policy with loopback enabled and set to merge. I've tried with the option in Computer Config => Policies => Administravive Templates => Windows Components => Internet Explorer => Make proxy settings per-machine (rather than per-user). Nothing seems to work and I am thinking it is related to the registry key, path, and hive that I am using when trying to do this as a computer policy.
I am hoping for a solution that works on both XP and Windows 7 before I start looking for a another solution.