Private area in an XP Pier to Pier

I have a very small network running XP pier to pier and the majority of the
information is stored on 1 computer for backup puroposes and the information
is stored in "Shared Folders" on that machine. I need to have an area that
holds some cofidential information and I would like to make that folder
available to certain people with the right password.
Is there anyway I can alocate an area that requires a password if accessed
from any other machine. With my limited knowledge, I can only achieve a
situation whereevery machine is available on the system or where I get the
dialogue "you do not have acces, consult the system administrator"

Any help appreciated.

Ray C