XP Home Edition and protecting shared folders

I have 4 pc's networked together using a router. pc1 (XP
Home Edition) has 2 folders that need to be shared
read/write) with pc2 and pc3. I don't want pc4 to be able
to access these folders.

I read that I can get to the folder security tab in 'XP
Home' by booting in 'safe-mode for networking'.
Can I set permissions on the 2 folders to only have
read/write access to specific computers or workgroups or
specific accounts? Do I need to add accounts to pc1 for
each account on the other pc's that need to access the
shared folders?

Is there anything else I can do to prevent pc4 from
seeing pc1's shared folders? I need to have pc4 on the
network to access the internet.

Is there anyway I can prompt for a password?

Or do I need to upgrade pc1 to XP Pro?

thanks for any help, lisa