Yes this is possible. You must create a new section for each directory/folder. Then assign each section to its relevant folder. You can then set different rights for each section, typically restrticting viewing of articles of a given section to a certain user type.
I have done this, and it works perfectly. Check out this tutorial to get started with users/login if you have not already looked at it: http://ez.no/developer/ez_publish_3/documentation/incoming/tutorial_using_userregister
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