How to password protect Files and folders in UBUNTU 12.04 version? The files and folders must not be deleted unless the password is entered.

Why not use permissions in the file system to provide security rather than awkward password protection. It's a lot easier and sleeker.

as far as passwording goes... right click and encrypt... as for not allowing deletions.... as actionparsnip said... use permissions.

if you are worried about people accessing your files via a live disk or such... just encrypt your home directory

which you can do with the following command
sudo ecryptfs-migrate-home -u user

you must do this from another account however... and follow the notes after you run this command... they're important to read