Possible to branch off a User Account?

I'm working on a machine that is all set up and running as admin. What I'm hoping to do is take the machine exactly as it is in it's current state, and create a new User Account that has a separate name and password so that I can install things like Dropbox and Notational Velocity that would contain private information that would only be accessible when I'm logged in under the passworded account.

The OS is Lion.

You can create as many user accounts that you wish (within practical limits of course) and password protect them. However, FileVault 2 is now built into Lion and may be a better way for you to protect data and certain private information.

Read up on FileVault 2 in this Apple KB article: LINK

Is it your Mac? Can you simply maintain sole control of the admin account and then create a secondary user account with restrictions? That might be simpler (assuming you are the only admin account user).