|I assume all the students PC are on the school domain. The only way to permanently disable students from turning on InPrivate browsing is through the Group Policy (available only in XP Pro).|
Here is how:
Click Start, Run. Type GPEDIT.MSC and hit ENTER
User Configuration / Administrative Templates / Windows Components / Internet Explorer / InPrivate
Turn off InPrivate Browsing:
This policy setting allows you to disable the InPrivate Browsing feature.
InPrivate Browsing prevents Internet Explorer from storing data about a user's browsing session. This includes cookies, temporary Internet files, history, and other data.
If you enable this policy setting, InPrivate Browsing will be disabled.
If you disable this policy setting, InPrivate Browsing will be available for use.
If you do not configure this setting, InPrivate Browsing can be turned on or off through the registry.