Or, if you want to stay out of the NetInfo stuff above, you could try doing it via changing permissions on the account. I used Batchmod (shareware, free download, super easy to use). After creating the user account(s), I then selected them and used BatchMod to change permissions so:
Owner = [user name], R,W,X
Group = Admin (presumably you), R,W,X
Everyone = nil
Essentially, they can still access their accounts, and for whatever reason, only they own and can access each (not into each others). But as Admin you can also R/W to it from your shell; they can't get into yours b/c they aren't Admins, and can't get into each others' b/c "everyone" is prevented.
It makes more sense in an academic lab, but I see what you're trying to do. I do the same thing w/my wife @ home; she has her account, and its "technically" hers and "technically" secure, but if for some reason I need to move around in there I don't need to change users or invoke "root" level to do so.