I think this is the best way to do it:
Do what I do and inside each user's folder (real directory), have an hfs.diff.tpl with the normal template, then inside the root (either a real directory or add the file to the VFS) have another hfs.diff.tpl file with whatever you want, perhaps a custom home page, perhaps just blank or consisting of a redirect to %user%, or whatever, so the user doesn't see the usual listing of files. Also, make sure every folder including the root are set to browsable and for anyone to access.
To make it easier you can also use hfs.events to keep the user's templates synchronized from folder to folder with a single template on your desktop for making quick changes, for example, something like this:
[every 60 seconds]
{.copy|C:\Documents and Settings\admin\Desktop\User Template.tpl|D:\user1\hfs.diff.tpl.}
{.copy|C:\Documents and Settings\admin\Desktop\User Template.tpl|D:\user2\hfs.diff.tpl.}
{.copy|C:\Documents and Settings\admin\Desktop\User Template.tpl|D:\user3\hfs.diff.tpl.}
{.copy|C:\Documents and Settings\admin\Desktop\User Template.tpl|D:\user4\hfs.diff.tpl.}
{.copy|C:\Documents and Settings\admin\Desktop\User Template.tpl|D:\user5\hfs.diff.tpl.}
{.copy|C:\Documents and Settings\admin\Desktop\User Template.tpl|D:\user6\hfs.diff.tpl.}
OR: (I just thought of this)
Put that code above (except for the top 60 seconds part) in a file called update.txt on your desktop and then put this into a file called 'update user folders.bat' on your desktop:
copy update.txt "c:\documents and settings\admin\desktop\automatic.txt"
Then add this to hfs.events:
[every 5 seconds]
{.load|automatic.txt.}
{.delete|automatic.txt.}
Then just double click the .bat file after you make changes to the main user template. Add new users to update.txt like shown above.