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?
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.
