Restricting shared folder access on XP Home

Yes, I think so. Right now share access is for the Everyone group.  Also, permissions apply to the following group or user names: Administrators, Creator/Owner, Everyone, System, User, and Users.

FYI the name User is the logged in user for this XP Home computer.

Also, I shared the folder using shrpubw (Create a Shared Folder Wizard) with the option "Administrators have full access; other users have no access". Logically I should be able to permit only users in the Administrators group to access the folder, right?

Is the individual on the network you are trying to deny access to this folder need any special permission to do other things on the network or are they just an average user?
This step would only have to be done once.  If they are an average user you can add the two individuals to administrators group or power users group in the management console by right click on my computer> manage> local users and groups> users> double click on the users you want to upgrade or downgrade rights to > click member of> click add> click advanced> click find now> scroll through the list for either administrator or power users (if you are downgrading rights to a regular user make sure they are not admin or power users by highlighting and removing then following the above steps selecting them as a user) and highlight> ok out.

Then for any document you want the 2 users to have access to but not the third:
right click the document> properties> security tab> here you can highlight users> click remove.  the average user will no longer have access.  Make sure if upgraded the other user to power user that power user is listed as having access.  If not click add> advanced> find now> scroll down and select power users and ok out.

Hmmm, something that might be easier and quicker.  Do all three of you have logons on this one computer?  If you do just go to the last portion of my last comment only you can select the specific login names that you want to have access to this document.  If all three do not have logins on the main computer the document is on you can add them in the management console listed above by right clicking users> select new user> type in their login ID and password if they have one.  Then you can give access by name.

To answer your first comment, a denied user will not have access to any of this network's resources. While I have no control over their access to our network (long story) I want to control access to the shared resource on this Windows XP Home computer for just the 2 users I specify.

For your second comment, I've tried setting up usernames on the XP Home computer identical to the other 2 network users & passwords. But when I try for passthru authentication based on permissions they are denied.

Any further comments on this question?  To date I have not been able to control network access with any tool.  I can manipulate local user access, but not network access.