XP Home does not support the 'fancy' security options of XP Pro...
Also, in XP you don't need to encrypt folders to make them invisible, you can
A) Right click the folder and go to 'Sharing' -> 'Make this folder Private'. The folder & contents is not encrypted, but other users are removed from the access control list, so they can't open it unless they log in as you...
B) If you have 'Simple File Sharing' turned off (eg you have the normal WinNT/2k 'Security' tab in your file properties, remove everyone but yourself from the access list...
Either of those are better than encrypting stuff...
XP home is so dumbed down, it may not let you do what you want...
P.S. lay off the porn...