Important This section, method, or task contains steps that tell you how to modify the registry. However, serious problems might occur if you modify the registry incorrectly. Therefore, make sure that you follow these steps carefully. For added protection, back up the registry before you modify it. Then, you can restore the registry if a problem occurs. For more information about how to back up and restore the registry, click the following article number to view the article in the Microsoft Knowledge Base: 
322756 How to back up and restore the registry in Windows
  When you use System Policy settings for client
		  computers that are running Windows 2000, Windows XP Professional, or Windows
		  Server 2003, consider the following guidelines: 
		  
- Client computers that are running Windows 2000, Windows XP
				Professional, or Windows Server 2003 ignore System Policy settings that are
				placed in the Netlogon share of a Windows 2000 domain controller or a Windows
				Server 2003 domain controller. Instead, they apply Group Policy settings.
				
- Computers that are running Windows 2000, Windows XP
				Professional, or Windows Server 2003 and that are joined to a Windows NT 4.0
				domain apply System Policy settings from the Netlogon share of a Windows NT 4.0
				domain controller. 
- Windows NT 4.0-based client computers apply System Policy
				settings that are placed in the Netlogon share of a domain controller that is
				running Windows 2000, Windows Server 2003, or Windows NT 4.0. 
 When you use System Policy settings for client computers that
		  are running Windows NT 4.0 (or Windows 95 or Windows 98), consider the
		  following guidelines: 
		  
-  System Policy settings are applied to domains.
- System Policy settings may also be controlled by user
				membership in security groups.
- System Policy settings are not secure.
- System Policy settings persist in users� profiles (this is
				sometimes referred to as tattooing the registry), as explained earlier in this
				article. This means that after a registry setting is set by using a Windows NT
				4.0 System Policy setting, the setting persists until the specified policy is
				reversed or until the user edits the registry.
- System Policy settings are limited to desktop
				lockdown.
 To implement a System Policy setting to affect all
		  Terminal Server users who log on to the console or through the Terminal Server
		  client, follow these steps:
		  
- Start System Policy Editor (Poledit.exe), and then make the
				changes for your policy.
- On the File menu, click Save
				As, and then save the policy file on your hard disk. For example, save
				the file as C:\Ntconfig.pol.
- On the File menu, click Open
				Registry. 
- Double-click Local Computer, double-click
				Network, double-click System Policies Update,
				and then click to select the Remote Update check
				box.
- In the Update Mode box, click
				Manual (Use Specific Path), type a path in the Path
				for Manual Update dialog box (for example, type
				c:\ntconfig.pol).
 
 Notes- You can name the policy file anything you
					 like.
- To display an error message if the policy file is not
					 found when Windows NT starts, click to select the Display Error
					 Message check box.
 
- Click OK.
- Save your policy to the path that you specified in step 5,
				and then exit Policy Editor.
- Restart Windows NT for the changes in the policy to take
				effect.
Tip Every user or computer account that logs on after a policy is in
		  place is subject to the policy. Therefore, it is a good idea not to edit the
		  default user or computer account until you are familiar with System Policy
		  settings. Make a test user/group account in "User Manager," and then make a
		  specific policy for this user/group in System Policy Editor. After you have the
		  policy working correctly, you can then transfer the policy to the production
		  environment. 
 The settings in this procedure modify the following
		  path in the registry:
		  HKEY_LOCAL_MACHINE\System\CurrentControlSet\Control\Update
		  Remote Update:
 Category: Network
 Subcategory: System Policies
		  update
 Selection: Remote update 
Description: Controls how policies are applied to a Windows NT 4.0-based
		  computer. With UpdateMode set to 1 (Automatic, the default), Windows NT makes a
		  connection to the Netlogon share of the validating domain controller in the
		  user's context and then checks for the existence of the policy file,
		  NTconfig.pol. With UpdateMode set to 2 (Manual), Windows NT reads the string
		  that is specified in the NetworkPath value and then checks that path for the
		  existence of the policy file (in this case, the policy file name should be
		  included in the NetworkPath value). With UpdateMode set to 0 (Off), a policy
		  file is not downloaded from any system. Therefore, it is not applied.
Key: 
HKEY_LOCAL_MACHINE\System\CurrentControlSet\Control\Update
| Registry Entry | Type | Values and
				  Descriptions | 
|---|
| UpdateMode | REG_DWORD | Off = 0, Automatic=1;
				  Manual=2 | 
| NetworkPath | REG_SZ | Text of UNC path for
				  manual update | 
| Verbose | REG_DWORD | Display error messages Off
				  = 0 or value not present; On = 1 | 
| LoadBalance | REG_DWORD | Off = 0 or value not
				  present; On = 1 | 
 The UpdateMode registry entry only applies for the Windows NT 4.0
		  policy. For members of an Active Directory forest, the UpdateMode registry
		  entry is ignored, and instead, the Group Policy settings that are configured in
		  Active Directory are applied. To gain the same effect as using the UpdateMode
		  entry, you can use a GPO Loopback policy.
 For additional information about using
			 a GPO Loopback policy, click the following article number to view the article
			 in the Microsoft Knowledge Base: 
260370 How to apply Group Policy objects to Terminal Services servers
  For additional information about how to use
			 System Policy settings in Windows 2000, click the following article number to
			 view the article in the Microsoft Knowledge Base: 
318753
 How to create a System Policy setting in Windows 2000