Guest Account, Local Only

[Cyberiade.it Anonymous Remailer]

I'm interested in setting up a guest account on my Ubuntu Gutsy
system for local use only. Meaning, friends could have a username
for one account to share, use all of the local devices, CDROM, floppy,
USB, etc. and Internet, but with one condition:

No access to the normal user's directories and above ~/home directories.

The normal user being the one with the password to do sudo commands.

Would there be a simple step-by-step how-to on performing this?
Would there be any disadvantages to doing this?

TIA