On a Win2000 or WinXP Pro system, make yourself (or the guilty person) a Restricted User account. On my system, this seems to eliminate the popups entirely, and even if it didn't, the Restricted User account doesn't have the rights to install the stuff*
Alternately, go to (on a Win2000 system) Start > Settings > Control Panel > Administrative Tools and start Local Security Policy. Go to Local Policies > Security Options, go to the bottom of the list of options and set Unsigned non-driver installation behavior to Do not allow installation. This is presently sufficient to stop junk from Gator from installing.
*I've encountered at least one spyware that will subvert the system so that even Restricted Users can subsequently install anything they want, even after the spyware is removed (I'm talking about IncrediMail here).