You can't, per se, block a subfolder.
What you can do, however, is create a seperate Outlook datafile and use password protected encryption. Have outlook not store the password, and then you'll have to enter the password on each startup of Ol2003. Do note, however, that outlook doesn't always close fully when you exit, so it may not just be a matter of exit, but restarting the machine after exiting before it'll prompt the password again.
I'll check this the next time I can.