Yep, gotta agree with pds -- Mac OS X is a true, multi-user system. Use multiple accounts (one for you, one for child number 1, one for child number 2, one for the husband, one for grandma, one for guests, etc.) and no one will be able to see anything anyone else has... unless they let them.
Having multiple users using a single account is counter-intuitive, and then trying to use that single account as a multi-user account will only lead to headaches, frustration, and a life of having to use funky workarounds.