How to make sure the final bone in an IK chain doesn't rotate? I've got a chain of inverse kinematic a bones, and I want the one that I grab to be unable to rotate while it is moving. How do I do this?

My setup is a rigged car assembly arm: http://sendvid.com/8z51fsgm

When I move it, the end of the arm points towards the cursor rather than simply translating up/down/left/right like a real arm. Example: https://www.youtube.com/watch?v=xglALqtKGAc

Notice how the arm's grabber tool never rotates absolute to its surroundings. The rest of the arm knows how to rotate in such a way that the tool never has to. How do I do this in Blender?
There are two ways that you can do this.  You can either select the bone and add in rotation constraints or you can do it a really easy way.  Simply select the bone you want not to rotate while in pose mode.  Then press N to bring up the additional menu on the right side of the view port.  The top tab that says transform is what you want to look at.  Where is says rotation, select all of the locks and this will prevent that bone from ever rotating.    Hope this helped!