Restrict Internet Access on Workstation

I have a kiosk machine that is all nice and locked down running Windows XP.  It worked perfectly fine when they only needed access to one location.  I just removed all methods of changing the URL and auto-loaded the page they needed.  Well now, I need to grant access to 2 or 3 sites and restrict everything else.

My first thought is to modify the hosts file and give routes to the sites I want and somehow turn everything else to either a dummy page or the localhost.  The problem is, can I use wildcards in the host file?  

If so, how would I go about it?

Any other thoughts on how to accomplish this?
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Maybe lock down the machine completely except for 3 URL shortcuts on the desktop?

Deploy a content filtering software such as Websense and only allow that workstation access to those particular sites?

Change the firewall to have a rule that only allows that computer to get to those particular sites/IPs?

Good question, I'm interested to see what others think.
You can also set up a fake proxy server in ie and give a few sites exeptions.

This can be done either editing the registry or through IE

IE Steps

Open IE > tools > internet options > connections > lan settings >
check the option 'Use a proxy server...' type in a non existent address e.g or something like http://nowhere.ccc >
now click the 'advanced' button > under 'Do not use proxy server for...'

Registry method...
Windows Registry Editor Version 5.00

[HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Internet Settings]

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