Allowing one user to access C drive whilst restricting others

Configure your domain's password policy with a "Maximum password age" of 0 days (unlimited - effectively a global "never expire") and a "Minimum password age" of 998 days (the maximum).

The users will be able to change their passwords after they're 2.7 years old - if that's an issue, then put a to-do item on your calendar for July of 2014 to move the date of their pwdLastSet attribute up manually.

It's because you have Computer Settings Disabled configured. Try changing that dropdown to just plain Enabled and try that.

With that said, you're configuring both Computer Policies and User Policies in one GPO. Technically, there's nothing wrong with this but it is considered bad practice and makes troubleshooting difficult.

It also makes a mess of your security filtering. For example, in your instance, having the computers listed makes no difference whatsoever because you have Authenticated Users listed.

I'd suggesting splitting your policies into two - one containing all of the Computer Configuration items and one containing all of the User Configuration items. If you want both sets of GPO's to apply to all computers in that OU (And therefore all users that logon to them) then just leave both sets of Security Filtering to Authenticated Users. (Though bear in mind it'll apply to administrators, too)