that all users had to log into their own limited accounts and you as Administrator would have to set local policy and restrictions as well as ensuring user permissions were only what you desired them to be. Easier done with XP Professional than XP Home but you failed to mention version which is IMPORTANT as Home and Pro are not created equal.
Possibly a better option for you if you are unaware of the use of permissions would be to take advantage of a free product Microsoft offers that makes use of policy and permissions through an easy user interface. The product is called SteadyState (formerly Shared Computer Toolkit). You can read all about it and download it from this link:
Shared Access Computing with Windows SteadyState
Do note that you should also assign a password to the default ADMINISTRATOR account so other users can not boot to it to make changes.
I want to restrict internet access for a computer. I want it to only be allowed to send and receive e-mails, and only go to certain sites that are specified. How would i do this on an xp system?