Help on shared folder security on network

[winman]

I hope this thread is at the right place. We have windows server 2003 and windows XP clients (peer-perr network). How do I secure shared folders on a shared drive? I want to make certain folders on a shared drive available only to authorised persons, ideally through a password protect.I tried the NTFS security option. Right click on the shared folder-sharing and security tab- security- advanced- and added authenticated users. Then i went to the sharing tab- permissions-add. When i tried to add users here, i found that i could see only the local users and local groups. How do i add network users here? Or is there an alternate method? Any help regarding this willl be greatly appreciated. Thanks in advance!!