Problem with file access.

Problem with file access. I can read a text file if it is placed in
htdocs but not if it is placed in other folders. I am running Apache
2.2 as a PWS and MySQL to learn/practice PHP on XP. I am setting up
sub folders below htdocs, each one a different practice web site.
Should they be set up as virtual host on 127.0.0.1, so I can have the
permissions to open a file stream to read files, or is it a question
of setting the permissions to each individual document root somewhere
else?

Thank you John in the UK