While the suggestions above are all worthwhile, generally speaking none of them should be necessary. Mac OS X is already set up as a multi-user-friendly system.

If you want to keep "your stuff" away from anyone else's "stuff," give them their own account (level to be determined by you). They can't see your stuff, you can't see theirs.

Should you need any further protection than that (for example you might leave the computer unattended), set a screensaver that's activated by a hot corner, and requires a password to stop. Drag your mouse to the hot corner every time you leave your desk.

Between using your account strictly for your own use and protecting your privacy with the secure screensaver, I can't see where one would need to go through all this other encryption/hidden folder business, which IME usually ends badly anyway.