U can always encrypt the file and have a password to access them. What u r describing is more along a Sever/Client relationship. Win Win XP Home or Pro really doesn't offer much help in this area.
Going back to the link provide by EEVIAC.
Section II Step 1 select the Do Not share this folder option. Do this on the folders u do not want to share.
Another thing u can try is:
Go>My Computer Rt click the C: >Properties>Sharing. U will see a warning about the risk of sharing, select it. U should see a option/box that states Make this folder Private.
One solution is a Linux box. The PC doesn't have to have the power of a full server, but u can still control permissions, right, access control to users. Now a days Linus flavors are ez to configure.
Wrie back and let us known if this works for.