These websites will help you walk through the steps of configuring your options.

http://www.microsoft.com/windowsxp/using/setup/maintain/powermgmt.mspx

http://www.microsoft.com/windowsxp/using/setup/learnmore/russel_02march25.mspx

dariusg, these require admin privileges don't they? We need a way to set the power configuration for a regular user that doesn't have admin rights. Sorry if I didn't make that clear in my problem statement.

going off of the pictures in the first link of the comment above mine,
while loggen in as admin, go to "Control Panel"
then go to "Performance and Maintenance"
then go to "Power Options"
Under the "Power Schemes" tab, go to the power schemes drop down menu and choose "Always On"
Then in the 4 drop down menus below that, make sure that all of the menus say "Never"
 
Then click apply and reboot. The settings should be saved for all users on that laptop.

Ok, then you must use the registry settings option to change the permission to allow them to change the power option. Most any registry option can be used by a non domain computer or a computer that is part of the domain. The difference is that you must go to each computer to run the registry fix to allow the access if your aren't on a domain.

http://www.softwaretipsandtricks.com/forum/windows-xp/6870-problems-power-options.html

Log in as administrator and set the power options you require - the same power settings apply to all users by design.

Hmmm, logging in as the "Administrator" or anyone with admin rights and changing the power options doesn't seem to have any affect on user accounts, even user created after this change. I've tested this on serveral mahcines and it doesn't work. Am I missing something?

As far as changing the registry, the link dariusg listed had the note "Change the permissions for the users of GLOBALPOWERPOLICY and POWERPOLICIES => give them full control." Well, how to you give them full control?

I guess I'm looking for a complete cookbook description of what one would need to do to accomplish this and I can't believe the MS made it SO difficult to do this.