Internet viewage tracking and site limiting

At my job, we sell sports equipment via ebay, as well as selling it in store. My boss is worried that people are surfing the web instead of working. What he wants is a program, or some way in windows to track internet sites viewed (other than cookies, etc, a stand alone free program would be good), and a way to block any sites other than a handful that we use, like ebay, photobucket, gmail, and our corporate site. Another thing he wanted, was is there a way to password protect the internet, for example in order to connect, one has to enter a username and password?

Sounds like you need a proxy server.