Many people would like to have their folders private. One of the many ways to have a folder private is to have a password for the folder. There are a lot of third party softwares available for password protecting folders in windows Xp.
Whatever you have, there is a software called Microsoft password protect. Whenever a user opens a folder the password is asked and the user has to enter the password for opening the folder. This is a good piece of software. Just try it.