Well for starters I imagine that the system account doesnt belong to the authenticated users but only the everyone group ... perhaps thats why the machine upon reboot sets the settings back to default.

refresh the group policies on the machine after you make the appropriate changes to the registry ... I would like to see if that is the cause.

secedit /refreshpolicy machine_policy /enforce

then wait a few minutes for the changes to propagate.

gtg back to work ... this is just the first thing to pop into my head

Registry permission changes are CURRENT and INSTANEOUS. Did you disable inheritance?

Unfortunately there is no way to truly manipulate granual registry permissions, at least in a domain context.

Regini.exe from the resource kit allows you to change permissions on keys, though I am not sure if Authenticated Users is allowed as a security group.

Digging up links

http://support.microsoft.com/?kbid=237607

Also got this one if you are interested.

http://www.labmice.net/Windows2000/Registry/regmaint.htm

In a domain context, manipulating registry permissions is far easier as it is done with GPOs.

Still got me thinking on this one.