Here's how I do it (yes this is where I keep my porn)
I assume you have some sort of media folder on your hard drive with separate folders for music and videos and pictures, each with a bookmark pointing to them in your XML file.
Mine is like this:
C:\MEDIA\MUSIC
C:\MEDIA\MOVIES
C:\MEDIA\PICTURES
C:\MEDIA\TVSHOWS
So I made another folder in there called C:\MEDIA\XBOX where I keep various xbox related stuff like builds of Xbox Media Center and tools like Qwix. I made another, nondescript folder called C:\MEDIA\XBOX\SYSTEM where I keep my porn. Now, I made the C:\MEDIA\XBOX and C:\MEDIA\XBOX\SYSTEM folders shared on my PC, but didn't set up a bookmark directly to the SYSTEM folder in my XML file. Instead I set up a basic SMS bookmark to C:\MEDIA in the "My Files Shares" section of the XML (not the "My Video Shares") like this:
<path>smb://10.0.0.2/media/</path>
So when I'm using my Xbox, instead of going into "My Videos" I go into "My Files". Then I just click on my SMS share, browse down to XBOX, browse down to SYSTEM, and then click on the video I wish to play.
So the folder isn't "hidden", strictly speaking, but the chances of it ever being found are EXTREMELY low. <