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Check out this Multiple user software. I believe they are other similar programs for the Mac, I recently came across another but I can not remember what the name was. You could alternately set up a limited user account through the multiple user control panel.
You have to turn on multiple users and make at least one account for you and one for students.
Then click on the student account and choose "panels" as they type of account. You can then
select what they can see and what they can run.
Note that this is fairly easy to bypass if the student is clever enough and has access
to an OS cd, so don't get too complacent.