If you are using XP Pro and the school PCs are part of a domain,
there's quite a long way to do it... I can't find any short ways to
do it, other than what photoseeker suggests, load via a server.
Make sure you are logged in as part of the administrator
group.
The long way is this:
Go to Start > Control Panel > Administrative Tools >
Computer Management
On the left hand side, click on the + sign to expand Local Users
and Groups
Select Groups
On the right hand side, right click and select New Group...
Give this group a name and description. Make sure the description
is descriptive enough, otherwise you will have lots of problems
troubleshooting if you ever need to. Give a description like "This
allows students to use Touch Typing software only" or something
similar to your problem.
Under Members, click on Add.
Add in all the students ID and click on Check Names
Once done, click OK to apply all settings.
Next, disable Simple File Sharing
Open My Computer. Go to Tools > Folder Options
Select the View tab
Scroll all the way down and untick this box: Use simple file
sharing (Recommended)
Click OK to apply the settings. Close and open My Computer
again.
Locate where the touch typing software is installed.
Right click on the folder and select Properties. Note that it's
folder, not files.
Select the Security tab
Under Group or user names, click on Add.
Add in the group that you've created earlier.
After adding in the group, click on once to select it.
Under Permissions for users, tick Read & Execute box
Click OK to apply the settings.
Log off and log in as one the students
Check if the permissions are applied properly. If they are not, log
back in as part of the administrator and make changes.
Note: This will only set permissions on this particular folder. If
you want to make sure that they can't touch other things, just set
them to be part of the Users group as well. Users group is already
created in Windows XP by default.
Edit: typo error