We are running a Windows Server in our office (not sure of the version). We each have a personal drive (folder) on that server. Within that folder we have a "private" folder. Each person can access our folder but only you and an administrator can access your private one.
There are no passwords - it is done by you logging onto the network. If I try to access someone's private folder, I just get an "access denied" box.
It should be possible to do what you are doing but I am not the I.T department so could not tell you how (or if it is the same version of NT).