robert,
If your dealing with 2k or XP, you can use Run: gpedit.msc and set a bogus proxy server such as 'noproxy'. Then in gpedit, make it so the proxy entry can't be changed. You can also prevent iexplore.exe from running in gpedit. This will take care of all port 80 traffic and will allow email. If your in a routed environment, it will continue to work. This won't stop instant messengers, irc, ftp, p2p, etc...just web browsing.
Simpler is to set a bogus gateway in 2k or XP. Email will work, but don't do this if in a routed environment unless you want to manually enter persistent routing entries into the routing table. With a bogus gateway, your client does not leave the local LAN.
Both of the above assume you have admin access to the PCs and the users are plain users. Keep in mind that anything done in gpedit.msc affects the admin user as well.
ryan