If each student has a hard drive, they can use external accounts. [I believe that if you create a user in System Preferences -> Accounts and then Ctrl-click on their name, and choose "Advanced Options..." you can specify that their home folder should live on their hard drive. Then, they merely need to plug in their hard drive at the login screen and it will show external accounts that can be logged into. See this tip if you have to move an account.
Be sure to make an image of your computer setup. [NetRestore used to be the tool to use, but it is no longer readily available. Deploy Studio and InstaDMG are tools to look into, and Apple's Server Admin Tools include an image creation tool that you ought to be able to use without having a server.] With an image, you can set up the machines to be identical, and if one is hooped, you can re-install the image.
If you opt not to use the external accounts, it ought to be possible to put the /Users folder on a separate partition, and then, again, if the software becomes broken, you can re-image it to a pristine state.
Regarding the netbooting idea, it is possible to use a Mac client or a Linux box as a netbooting server, it is just a lot easier using OS X Server.