In tip 2492 » How do I 'filter' Local Group Policy?, I described one way to accomplish the subject task.
Microsoft Knowledge Base Article 293655 contains the following summary:
This step-by-step article describes how to apply local policies to all users except administrators on a Microsoft Windows 2000-based computer that is in a workgroup setting. The article also describes how to restore the original local policies.
When you use either a Windows 2000 Professional-based or a Windows 2000 Server-based computer in a workgroup setting (not in a domain), you may have to implement local policies on that computer that can apply to all users of that computer, but not to administrators. This exception allows the administrator to have unlimited access and control of the computer, and to be able to restrict the rights of users who log on to that computer.
The Windows 2000 Professional-based computer or Windows 2000-based member server must be in a workgroup setting for this procedure to work. In this situation, the domain policies cannot overwrite the local policies because the domain policies do not exist. Microsoft recommends that you make backup copies of all the files that are edited.