I want to create a kiosk station that will allow web browsing, but won't allow access to local files.
How can I go about doing this?
When IE runs in kiosk mode, it only allows access to web addresses. You would, however, have to find a way to disable access to CTRL-ALT-DEL on the kiosk if you are allowing people to have access to the keyboard or they will be able to close IE and access the OS.
This link gives an overview of kiosk mode for IE.
You can use group policies for this.
Is the network part of a domain? If so you can configure group policies from the server which will apply to this machine. You can block and even hide the local driver, disable control panel icons as well as Task Manager (which is what Black is on about with CTRL-ALT-DEL). Take a look here http://support.microsoft.com/kb/231289 and http://www.techrepublic.com/article/lock-it-down-secure-your-desktops-with-windows-group-policy-editor/1059493