I have a Windows 2008 server machine and I am trying to use this public IP 188.8.131.52 to synchronize the time, however, I would like my system to have Eastern timezone. When I enter the configuration using the steps give on this support page: http://support.microsoft.com/kb/816042 - my NTP client machine's timezone automatically changes to Pacific Time. How can I prevent the system from changing to Pacific from Eastern? Do I have to use another NTP?
You should not be using a NTP server from a different time zone. That server is in St. Louis and the physical distance will make a difference. It's pretty widely recommended to use NTP.org's pool for your NTP servers.
Regardless, NTP does not set your Time Zone (NTP actually only communicates in UTC, the protocol is only vaguely aware of what time zone the server is in). If your Time Zone settings are not sticking then you must have another process (possibly GPO) that is changing it.