I see this is an OLD question - but our soluton to this very problem was to use Active Directory group(s) to limit access to reports.

We had a group of reports that only a small group of people should see - so we made the main folder so all our Domain Users could Browse - then on the folder with the reprots that were restricted we made a Active Directory group named ProdRead(could be anmed anything) and gave that group Browse and removed the Domain Users from this folder.

Very simple - just put the people that need access to those resticted reports in the Active Directory group - don't have to do anything special to EACH report as long as they are in the protected folder.