Well guys we are not using windows 98 any more, so forget about just restricting the files through hide attributes.Windows 2000 and Xp Support file and folder level security.Here are steps for applying those restrictions in Windows XP.
Step 1: Open windows Explorer ----> click on tools ----> Folder options ---->Click on View Tab ---->uncheck the option Use Simple File Sharing (Recommended).
Step 2: Now Go to The folder that you want to share ----> click On Sharing Tab ---->Click On Share this Folder and give an appropriate Share name ----> Now Click On Permission Tabs. You will now see Three types of permissions
a) Full Control: If you check this, it will allow user to have read+write+execute permission your folder(and its file, since it will inherent the permissions).
b) Change: If You Check this, it will allow users to read+write permission on your folder
c) Read: If You Check this, it will allow users read only permission on your folder.
By Default Everyone has A read Permission on your folder. If you wish to remove everyone and allow specific permission to only particular users, Select Everyone and click on Remove.
Now Click On Add ----> Add Enter the User name and click on check names and then click ok. Now Select that Particular User and give the Desired permissions as mentioned above.
(Note: Dont Mess With Security Permissions.)