I have Windows 7 Home Premium. I was thinking if we can set a password for a specific folder to prevent any access to it. Is that possible?

If not, then is there a way to protect certain folders from getting unauthorized access?

If you fiddle with permissions a bit, you can lock a folder so only your user account may use it, but if you're logged in and leave for a few minutes, anyone can sneak over and open the folder. Use the Win+L key combination to quickly send the computer to the login screen without logging you out.

Actually, I believe this is the default behavior in Windows 7 with the Documents folders for non-full admins.