Use the menu item "User management -> Users" in the administration menu.
Press "Insert" on the page shown.
The basic user information should be reasonably self explanatory. The fields are described in detail here
Specify a login name, a password, name and email-address for the user.
In most situations you should set the user status to Active. However, if you define the user before he should be able to access the site you can set the status to Inactive, and then later on change the status to Active.
It is possible to define that a user must use a specific folder list.
However, this should only be necessary in very special cases.
In general you should let the roles assigned to the user define which folder list to use for the user.
All users needs a number of roles to be assigned to them.
After creating the usert press the "Roles" button and assign required roles for the user.