Note that you cannot disable simplified sharing in Microsoft Windows XP Home
Edition.
The fix is not in the registry, but in the code and you don't have the code
to modify and recompile.

Emil;
If you don't like
http://support.microsoft.com/default.aspx?scid=kb;da;307874

Try this, copied from XP HELP

[To make your folders private
Open My Computer.
Double-click the drive where Windows is installed (usually drive (C:), unless
you have more than one drive on your computer).
If the contents of the drive are hidden, under System Tasks, click Show the
contents of this drive.

Double-click the Documents and Settings folder.
Double-click your user folder.
Right-click any folder in your user profile, and then click Properties.
On the Sharing tab, select the Make this folder private so that only I have
access to it check box.

Notes
To open My Computer, double-click the My Computer icon on the desktop.
This option is only available for folders included in your user profile. Folders
in your user profile include My Documents and its subfolders, Desktop, Start
Menu, Cookies, and Favorites. If you do not make these folders private, they are
available to everyone who uses your computer.
When you make a folder private, all of its subfolders are private as well. For
example, when you make My Documents private, you also make My Music and My
Pictures private. When you share a folder, you also share all of its subfolders
unless you make them private.
You cannot make your folders private if your drive is not formatted as NTFS.]