Don't allow them to use their local hard drives (Score 3, Insightful)

If enough users are Windows 2000, format the drives as NTFS and lock them down. Don't allow them to write files to their own directories. Obviously, some concessions will have to be made for application use, but they probably won't find their way to the few directories where they could theoritically save files. Give all users mapped network drives, both personal and shared, such as H for their home drive and S as a departmental drive, K as a common drive, etc. Again with 2000, point their My Documents folder to their H drive, making them save stuff to the network without realizing it.

Now, get a good back-up scheme on your file server, which I assume you already have, and you won't have anymore data loss problems. It also removes accountability from you. You manage the computer systems. Tell users that IT is simply not responsible for data lost off their local HDs. If they ignore you and then lose data, shrug your shoulders and point to IS policy. That'll learn 'em and learn 'em fast.