Arpan Shah Microsoft Project and SharePoint Blog
One of the most frequently made comments: I want my Single Item Security! It reminds me of the old MTV ads.
It's true that we don't have single item security in the most recent editions of Windows SharePoint Services and SharePoint Portal Server.
Having said that, almost all the "requirements" that I have seen of single item security are not requirements at all. That is to say, if you really want it... ask yourself why? Most of the time, (80/20 rule), the business requirement can be solved by simply architecting the information correctly. That is to say, using sites, areas and multiple document libraries appropriately. There's a chapter on this topic in the recent Resource Kit for SharePoint Products and Technologies.
What does this mean? If you think it's a requirement --- really think about why you want it before going down a path of trying to implement a work around; for example, why not just have a special document library for very special documents? If you find yourself needing single item security in some cases, consider using IRM.
Having said all of this, I can tell you that single item security is high on the list of feature requests for the next version of the product. As for right now, if you and/or your customer does not want to use SharePoint Products and Technologies because there isn't single item security out of the box, I'd like to hear about it. Like I said, more often than not, the business requirement can be fulfilled by designing the portal properly.