Quick question-Is it possible to have bogus info put into your history files?

They are not cookies but rather files. They are hidden in a History folder. You cannot view them using standard tools like Windows Explorer but they can be viewed. And since they are files (they are saved in index.dat files), yes someone could write a program to modify them if desired.

A folder for the Administator account would be:

C:\Documents and Settings\administrator\Local Settings\History\History.IE5\

In this folder, more folders would be found based on file date. And in these folders there would be index.dat files.