In Windows 2000, the security policy is a collection of settings that governs how tightly secured your particular computer is.
Password Policy establishes the guidelines the users of this machine must follow when choosing a password, such as password length and how often they're required to change their passwords as a security precaution.
Account Lockout Policy configures Windows 2000 to lock out user accounts after a certain number of invalid logon attempts (an indication that somebody is trying to guess a password).
Audit Policy sets up Windows 2000 to record (audit) certain events, such as logon attempts and account management activities.
IP Security Policies on Local Machine configure Windows 2000 to use a special form of IP (Internet Protocol, the cornerstone of the TCP/IP protocol suite) that transmits data over the network in encrypted form.