Several people want to use FileVault-type protection on less than their entire home folder. I do this to use the same type of protection but for a single folder.
1. Using Disk Utility (in Applications > Utilities), create a sparse disk image using AES-128 encryption. I made mine the size of a DVD so it would never become too large to back-up to a DVD. Also, I saved mine at the top level in my home directory.
2. When creating the password, be sure to leave "Remember Password" checked, so that your keychain can open your disk.
3. Go to the Accounts preference pane (in Applications > System Preferences), and under Login Items, click + to add a login item.
4. Navigate to your 'xxxx.sparseimage' file and add it to the login items list. Now it will auto-mount every time you login.
The only down-side to this hint that I can come up with is that the user must be proactive about where he or she places files. Also, if you place a file in the wrong space, be sure to use 'Secure Empty Trash' to dispose of the non-encrypted version.
[kirkmc adds: There have been several hints about FileVault and other ways to achieve the same functionality, including this hint. It is obvious that if you just want a single folder, or disk image, it's simple to create it from Disk Utility. (In fact, I wrote it up back in 2004 for Macworld.) It's useful to know about this, though, whether you want to use it for many files, or simply to lock down a selection of files.]
Mac OS X Hints
http://hints.macworld.com/article.php?story=20070711100831587