requiring a password on win2k server

I have a computer running Windows 2000 Server, with a user account for each person in Active Directory. Each person has access to their departmental folders, as well as a personal folder. My question is this: when Person X is logged on, if they try to access Person Y's shared folder, they get a message that says "\\server\Person Y is not accessible. Access is denied."

Instead of just denying access, is there a way to configure the server to prompt for a name and password for the folder?

Personal folders (i.e. homedirectory) should only be accessible for the person in question and some services like backup, virusscanner and quota mangers. Other than that nobody should have access to anyones homedirectory

If you mean department folders set up user groups and add eacht person to the appropriate group(s). It's a lot easier to manage it this way than add indrividuals to have access to each folder.