The option you should check to block the App Store is actually "Installing iTunes applications." That wording is incorrect and will be fixed in the next release to "Installing apps." Select that option to "prevent installing or updating apps using the App Store or iTunes, and to remove the App Store icon."
Hope this helps.
yeah, and the itunes and app store are two separate "stores/apps". So if you don't want them in either, both will need to be blocked. iTunes is for music/video purchases.
I still want users to have the ability to install apps from the recommend apps list, I just don;t want them to be able to go out the market and download whatever they want. I want to restrict them to what we say they can have. Do you see where I am going?