You cannot password protect individual folders in XP. You restrict access by
assigning permissions to drives, folders and files.
To do this, you must be running NTFS as your file system on the drive in
question. If your hard disk/partition is not NTFS you will need to convert
it. To do this, open a Command Prompt window and enter the following
command:
CONVERT X: /FS:NTFS
Where X: is the drive letter you wish to convert. You may also want to see
http://www.aumha.org/a/ntfscvt.htm to ensure that you're getting the optimal
conversion.
After this step is completed and you've rebooted the computer, if necessary:
XP PRO: In Windows Explorer, go to Tools, Folder Options, View and uncheck
Use Simple File Sharing. Now, when you right click on a drive, folder or
file (on an NTFS partition) and select Properties, you'll see a Security
tab. Here you can assign or deny permissions based on user name or user
group membership.
HOW TO: Set, View, Change, or Remove File and Folder Permissions in Windows
XP
http://support.microsoft.com/default.aspx?scid=kb;en-us;308418
HOW TO: Set, View, Change, or Remove Special Permissions for Files and
Folders
http://support.microsoft.com/default.aspx?scid=kb;EN-US;308419
HOW TO: Disable Simplified Sharing and Password-Protect a Shared Folder in
Windows XP
http://support.microsoft.com/default.aspx?scid=kb;EN-US;307874