This article tells a telling tale of the incompetence in the IT industry. Security is a breeze under Windows XP. Preventing installation of software is one of the easiest things to do. Both the file system and the registry can be locked down to prevent installation of programs. Even the OS can be locked down to prevent the executing of applications except those application that are authorized.
This can all be done via the group policy editor. Simple, but most "administrators" don't even know the capability exists.
Although the Group Policy Editor may stop casual users from installing software, it will not stop an expert.
Windows Vista is harder, but it is still possible.