If you set a web folder attribute to hidden, users will receive 404 - File Not Found.
To prove this:
1. Set the WWWroot (or your default) to hidden.
2. Use your browser to browse to the folder.
3. You should receive 404 - File Not Found.
4. Set the attribute back to non-hidden.
5. You shou now be able to browse.
NOTE: Microsoft has acknowledged that this is a problem with all versions of IIS, from IIS 2.0 onward.