I've done the last troubleshooting/adjustment I'll do before my time off.
1) Server 2003 has draconian default interent security settings that cannot be turned off. Rather, one must uninstall the Windows Component responsible. I did that, and users should not have any site access problems.
2) For some reason RSrv.exe is not automatically starting when a user logs in. This is needed for the Sanako 300 console to function. If it isn't running there will be an error message in the Console "taskbar" (the colourful tabs at the bottom that list the various sources, like Cassette 1 etc.) something to the effect of "RSRV error -42 \\Lab-B-Teacher not responding". If you start RSrv.exe from C:\Prgram Files\Sanako\Shared Components\NetCommPlatform\RSrv.exe and relaunch the console everything should work. My short-term solution was to put a shortcut to RSrv.exe in the Startup folder for All Users. Not elegant or failsafe, but it seems to work.
3) The media directory for teachers to put their own media for distribution is in the All Users tree - I set the folder to be modifiable by everyone. This is needed for collection of student work and sending out files that instructors bring with them.

There may be other problems which I have not yet addressed. Some things have not been fully tested either. For example, the audio card setup for Sanako seems OK, but I haven't had the time to run the complete setup. I also have not tried pushing out URLs via the console or other "push" type browser activities, nor have I fully tested telephone or alternate media sources. That said, CD as source seems fine as does Teacher as source. Feedback welcome...