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Windows 7 and Server 2008 R2 come with a security tool called Applocker. This allows admins to restrict applications to a specific white list which can be as granular as the individual application versions.

Apart from considerations of how practical this is to run, how much real world security would running a fairly tight config provide to an 'average' home system?

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Whitelisting applications is a defense-in-depth measure. While it won't prevent a truly determined person from doing something nefarious, it will stop most people -- especially if users are running as non-admin.

Practicality is relative to your environment. If it's as you say, a home system, then the liklihood is that you don't have group policy in place. You would have to manage the configuration on each system manually.

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default-deny for applications is very good idea and provides much higher security than having just antivirus and antimalware –  Hubert Kario Jul 20 '11 at 6:41

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