How to disable Offline Files on Windows 2000 and Windows XP clients?

You can disable Offline Files by using the Allow or Disallow use of the Offline Files feature Group Policy at Computer Configuration / Administrative Templates / Network / Offline Files.
If you do not configure group policy, you can use REG.EXE, built into Windows XP, Windows Server 2003, and later operating systems, or installed from the Windows 2000 Support Tools, and run

REG ADD HKLM\software\microsoft\windows\currentversion\net cache /V Enabled /T REG_DWORD /F /D 0

on each client.

If you use group policy, or modify the registry, Offline Files will be disabled and users cannot enable it using the Tools menu in Windows Explorer to select Folder Options and the Offline Files tab.

NOTE: By default, Offline Files is enabled on Windows 2000 Professional and Windows XP Professional.