As logos implies, this isn't available natively in XP Home, but natively in XP Pro, so XP Pro would be an expensive utility. But your question was
"Does anyone know of a "magic" utility" that will enable me to access and change "local security policy settings" on XP Home?
I'm sure there is but I don't know of one off the top of my head, so I would suggest checking out somewhere like, snapfiles.com or download.com, or other download sites for tweak utilities od system settings utilities, etc.
I see you are hedging your bets by asking on multiple forums (or GodzillaCache),
http://www.theeldergeek.com/forum/index.php?showtopic=32561 
and that seemed to get some hits.
So if that wasn't you, strange to see the exact text of the question if not you, did you not check out the advice and locations given.
