Access to the C drive is denied by default for a very good reason. There is absolutely NO need to open up your C drive. 90% of the stuff on the root OS drive is useless to anyone not logged in to your PC. On top of this it is a major security risk. Most of the folders are useless to anyone sharing them, but it is a nice easy way to get malware onto your machine.
If you have user folders on the C drive that you need to share then do them individually, here is a tutorial: File Sharing - Between XP and W7 (and vice versa)
Here's a screenshot of my C drive, which illustrates my point. Out of 10 files/folders on my C drive, only ONE is actually worth sharing. I suspect your's looks similar.
The reason you are being denied access is because the stuff on the C drive is "owned" by System and not your user account. The "unuseful Users folder" as you put it, has the stuff you want to share on it.