It is possible to protect a part of your web site with a password. This documents walks you through the process of setting it up.
There are a few things you need to consider before setting up passwords.
Instead of distributing a single username/password pair to a group of people, it is a better idea to have each user have their own username and password. Refer your users to the Password Generator, and have them email you their encrypted passwords. It saves you from the encryption process, plus it keeps their passwords secret.
An SFTP client that allows you to rename and edit files on the server makes managing your passwords a lot easier.
Next: Enabling Protection