When blocking pop-ups backfires

Microsoft and its problem child Internet Explorer, in the latest fit
 of SP2 security fever, decided to take a hard line on blocking pop-up windows.
 Fair enough, but how do they tell what counts as a pop-up?

Our web applications routinely use client-side scripts to open new windows, for things like choosing a value from a lookup list. Or at least they used to. Once the service pack is applied, those windows are blocked, and that's a problem for us.

Try explaining to an end user that they have to turn something like this off in their own settings. They shouldn't have permission to make that kind of change in the first place. 
Apparently there's a way to set something magical on the domain server that overrides the settings on local workstations. That's the official advice from Microsoft support.

Has anyone run into the same problem? Can pop-up blocking be restricted to Internet sites? If there's no reasonable way to configure it, I think the blocker is likely to do more harm than good.