Another idea thanks Grumpyoldgit - will investigate if it"s possible (politically I mean!).
I never quite understand these "USB=virus" style bans, as 9 times out of 10 the same machines are connected to the internet and if the antivirus can cope with that it can cope with the odd memory stick being inserted
I'm working on using virtual computers at the moment. The idea is that you will have running on the actual host computer a virtual (in my case win XP) computer. At the moment I'm building an image to use on "VirtualBox" that will have some of visual studio express.
When it's finished I will disconnect the virtual machine from the network and lock it, so that in essence you can give students full admin access to, and allow programming to take place on a virtual computer which is in all regards sealed in a locked environment where there is no risk of it being used to propagate a virus , hacking, packet sniffing or denial of service attacks...
I cant see anyone having an issue with this as the software is totally free and if it's done right there is zero risk.
I'll be happy to share this with anyone who is interested in due course