you need to make sure hidden files are hidden too. open up my documents, then at the toolbar at the top Tools > Folder options > View then at the bottom of the sroll box (no need to scroll) it says hide hidden files and folders, make sure they're hiddden here
Today, everyone from toddlers to the elderly know quite a bit about computers. I would assume most people know how to view hidden files from the folder options.... The hidden attribute suggestion might work if you are trying to hide files from infants or the ancient... but not most people. kingyoun had the right idea, if you have XP home you can use the simple permissions or if you have XP Pro you can really mess with the permissions....