I looked into steady state for a public computer a while ago. MS only supports this for WindowsXP or Windows Vista, and we wanted Windows 7. In checking into some forums, there was annecdotal information for it working on 7 … if you want to try that.
MSDN also had an article for making a WindowsCE-based kiosk, which might be another option.
I have not reverted a steady state machine to get rid of viruses, but I would expect it to be as effective as system restore (mixed benefit). On Win7, the limited user does a better job of keeping someone from installing anything on a machine than the previous 2 OSes. Coupled with a good security suite, we’ve been successful in avoiding problems.
There are linux kiosk distros, and you might consider installing a LiveCD to a hard drive or, if you have a CD/DVD drive with reasonable speed, run it from a read-only disk.
Whatever you do, have an image of the drive for quick reversion.