How do I remove the padlock button from the front panel?

The way to do this is described in the Solaris 7 AnswerBook2 User Collection.
Reference the:  Solaris Common Desktop Environment: Advanced User's and 
System Administrator's Guide.  Navigate through the following sections:
 
        Advanced Front Panel Customization
	Modifying the Main Panel
	To Remove a Control

To make a system wide change, copy /usr/dt/appconfig/types/C/dtwm.fp 
to /etc/dt/appconfig/types/C and edit the CONTROL Lock section by adding 
the line

  DELETE	True

before the final closing brace.  

Example:
  CONTROL Lock
{
  TYPE                  icon
  CONTAINER_NAME        Switch
  CONTAINER_TYPE        SWITCH
  POSITION_HINTS        1
  ICON                  Fplock
  LABEL                 Lock
  PUSH_ACTION           LockDisplay
  HELP_TOPIC            FPOnItemLock
  HELP_VOLUME           FPanel
  DELETE	True
}

*** Sun does not support customization of CDE. ***