All the companies that I've worked at, this was handled by HR either at time of hire, or when the policy was put into place. A basic one page document that was signed and returned to HR and placed in the employees personal file, that said that I could use the net, but looking at p0rn, warez, etc would get the employee fired.
Just make sure that there is a copy of the policy available for employees to look at on the intranet site.
A written signed policy gives you some legal recource and protection in the event that someone violates the policy and needs to be terminated, or someone gets offended because of what is on the screen of someone else.
Denny
Between the ESP=ON and the RUM (Read Users Mind) upgrade, I'm ready to go.