Policies are a built in method for making changes to the registry. Most of these registry functions are related to the appearance and functionality of the desktop. For example one policy allows the removal of the Run command from the start menu.
Policies are contructed using special programs called Policy editors. The editors contain a list of options that you can choose to select or not select. Each option corresponds to a registry change. The types for changes are limited to the list of options included in the policy editor. If you want to hide all of the drive letters there is a policy option you can select to do this. But if you want to hide only one of the drive letters you must accomplish this functionality using some other tool because the policy editor does not give that option.
There is one policy file for a system but it can contain several different policies. For example you may have one policy for students, one policy for staff and a third policy for administrators and all of this would be stored in the one policy file.
The policies for Windows NT are different from the Windows 95 policies and the NT policies are incompatible with 95. So if you want to use policies on both operating systems you will have to create two sets of policies.
Policies for Windows NT
Policies for Windows 95