I have 2 teenage sons, and have reasonable experience in this area!
Personally I would not attempt to use one PC as a "server", unless you actually have a server OS installed, and can work with a domain rather than a workgroup. ICS has no support for content filtering and logging, which would be one of the main reasons you would want to use it in your scenario.
I suggest that you use a broadband router that allows you to set internet access policies based on IP address, controlling time for internet access (or just turning it off). Most routers give you the option to allow / block a handful of sites / domains, which can be handy, but it's not large enough to be useful, although the router logs may be able to show where they have been visiting.
For much greater control, configure the laptops to use OpenDNS as their DNS servers. You can then tailor the kind of sites that are allowed / blocked. Free subscription gives you adequate granularity: if you pay more you can get a longer black / white list to play with. You can investigate various free and non-free software like Net Nanny etc., but I find that Open DNS with minor tuning works reasonably well.
You can implement log on time restrictions directly on the laptops using local Group Policy settings in Windows.
You can, if necessary, remotely shut down a PC from another, provided you have admin rights on the target.
Above all, make sure their accounts are User-level only and set a BIOS access password on the laptops (and if necessary a power-on password), so that if you want to block booting from Optical / USB drives it won't be (easily) bypassed.
SD