Can I block applications with a Group Policy?

First create a new Domain Policy.

Then give it a name and edit.

Now go to Computer Configuration.

Now go to Windows Settings.

Then go to Security Settings.

Pick the Software Restriction Policies.

Now we add all the programs *.exe files and stop them from executing for everyone or for specified Groups (you will have to create those in the AD).

This will work on W2K2 workstations and above. You can optionally follow the creation of a Software Restriction Policy here and here.