A "guest" was able to install Google Chrome on the guest account in Windows XP.
How can I prohibit installation of any software in Windows XP and Windows 7?
A guest does not have rights to install system-wide software, but he can write to his or her profile.
Combine that with programs which can run from a single binary or which are specifically designed as 'portable' applications with no need to access the registry or anything else outside their start directory and a guest can run each such program as desired.
The only way to stop that is to blacklist all programs except those on a whitelist. Windows has policies for that. To enable those use