Where can i find freeware or cheap software (less than $50) that will
lock a windows 2000 computer to only allow the user use of the browser
(Internet Explorer) - for example, applications will be running in the
background, but the user cannot minimise the browser window and access
them without typing in an admin  password first.

The end result is that they can only use the browser to surf the
internet and can do nothing else on the machine?

You seem to want to run your computer as an internet kiosk, or interactive kiosk.

If this is true, you may find information in the Microsoft KB at

http://support.microsoft.com/?kbid=555463

also try 

http://en.wikipedia.org/wiki/Interactive_kiosk

If these are not sufficient look up "internet kiosk" at google for how-to's
software etc.