I caught a student while taking an essay exam, accessing his entire hard drive and outline study material which he copied and pasted into the exam answer box. The only way I was able to catch him was to find a part of his answer that had nothing to do with the essay he was answering and was an exact quote from a model answer that I provided in-class to a similar essay question.
I was trying to think of a way we could monitor the student within populi itself. We use a screen capture program to capture lectures that are then converted to mp4 and mp3 format for posting on populi lesson tabs. The system works perfectly for that purpose. If we could capture a student's screen while taking an exam, we would see if she was accessing areas on their computer that are prohibited. It would be similar to a key stroke capture program but with video.
The problem we would have is that the student would need to install the capture software which always results in some degree of software incompatibility. This would not be the case if you could integrate it into the exam taking module.