Internet access on company computer

We are a small business, with three employees. I am in the process of putting together an employee handbook. We just hired the last person earlier in March 2009.
We have two computers, one in the back and one in the front.
I was on the computer in the back a few weeks ago, and discovered that someone has been accessing adult XXX sites. Looking into this problem more, it is at night after we are closed. I am almost certain who it is that is getting on these sites.
My question is:
Other than buying a blocker for the computer, what other choices are there for this to be resolved? An instant messenger program was also downloaded without permission from the employer.
The second question is, can we as a business get in trouble for this person using our computer for such information?
Thanks for all the help