Setting up a password

I have a site with user name and password.
However I would like to have clients access a folder set up specially for each of them under my domain.com parent folder without having them access all the other files.
How do I do this?

are you talking about http or ftp access? in any case, this is a server issue, not a smartftp issue. in case of an apache webserver, you could use ".htaccess" files. the ftp solution depends on your ftp server application.

I am referring to my ftp site.
When setting up my site ftp I could assign a user name and password to access my site. I wonder if the same could be done assign a password to each of my client folders... nested in my domain... to upload and download and not have access to the others?

yes, it can be done, usually by adding a separate account for each folder you'd like to give access to. again, how this is done exactly depends on your ftp server software. what software are you using?

Have two.
SmartFTP and FTPVoyager software programs.
Running on a Windows server.

the client does not matter (smartftp or ftpvoyager or any other). if you're running the IIS FTP server that comes with windows, you'll need to add new windows users in order to create new FTP accounts.
i'm still having the feeling you mix up FTP client and FTP server software. smartftp and ftpvoyager are FTP *clients*, which are used to up- / download from FTP servers. an FTP server is integrated into IIS (that comes with the professional editions of windows), other examples (for windows) are bulletproof ftp, filezilla server etc. if you want to password-protect folders, you *only* need to make changes to the configuration on the server-side, which is why your question is completely unrelated to smartftp. hope this clears things up a little bit.

Sort of...your help pointed out the difference between 'client' software and server side software. I still am a bit confused to your statement...an FTP server is integrated into IIS (that comes with the professional editions of windows), other examples (for windows) are bulletproof ftp, filezilla server etc. Can you explain the IIS? I am running Windows 2000. I am being hosted by a company which has me on a Windows server. Can I assume that they would provide the service as part of their hosting package or is filezilla etc, a separate thing altogether. Have not had to deal with the problem until recently and as you can tell have very little knowledge how things work on the server side. I will contact my hosting company and ask them as well.
Thanks.

as you said you're "Running on a Windows server" i though you yourself are running the ftp server. as you didn't say which server software you're using, i assumed you're using the ftp server that comes with windows (see http://www.microsoft.com/iis/, IIS is a whole suite of server applications).
anyways, as my assumptions turned out to be wrong, let me explain a few more things: the company that hosts you is running an ftp server. although you say "I am being hosted by a company which has me on a Windows server", i bet your host is not running windows as an operation system for the ftp server, which also means they're not using iis (or bulletproof or filezilla) as their server software. just keep in mind an ftp server software is an application almost like any other, and just like some people may prefer openoffice over ms office, some may prefer filezilla server over the iis ftp server.
okay, enough of the confusing stuff contacting your hosting company is the right (and only) thing to do for you. this functionality should be indeed be part of their hosting package.