Here's my dilemma:

Our primary application was created with the need to run as a local
administrator. However, I want only that application to have access to
these areas.

I've tried creating a group policy with a Dynamic Local User having full
control of c:\, but the solution still eludes me.

My goal is to have Limited Users under Windows XP, and the application
still operational.

Could someone please provide an intelligent example of how to do this?

Thank you in advance!