My point though is that the password does not prevent anyone from accessing the machine - all they have to do is reboot the machine and they have access.

This provides no security whatsoever.

It would only work if the machine has a password to logon - if this is the case then just make your screensaver a .scr and the user can elect to use password protection via the display properties dialog - this will be the same password they use to log on meaning they are unlikely to forget it and you don't have to worry about doing any fancy coding.

Anything else is a waste of time becuase it just isn't secure.