I am building a customized distro of IE and anticipate the need for IT shops to apply their policies to it. Anyone have experience with this and know what needs to be controlled by IT. Also, what is the mechanism for managing settings centrally?

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You can build a custom install for IE using the IEAK. In a domain environment IE is most usually controlled via Group Policy. As far as the settings are concerned, that is going to vary from company to company and is going to be specific to each company's standards, AUP, security preferences, etc.

http://technet.microsoft.com/en-us/ie/bb219517.aspx

http://www.bing.com/search?q=managing+internet+explorer+through+group+policy&FORM=MSNH11&qs=n

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