Yeah, you can do it. There is several ways you could go about it.
First, make sure that your index file can be a php file, and then add a if statement (or a switch if there is alot of them) to check the variable $HTTP_HOST. Most of the time, it will be www.yourdomain.com or just youdomain.com. Now, depending on where they want to go, do a meta-tag refresh to go to their /directory/.
Or, if you want to get fancy, you could set up a more complicated script that would include files from their directory so you couldn't even tell where the files are really stored.
Oh, and this will only work if you can do wildcard domains (ie, anything.yourdomain.com will arrive at your index)
Let me know if this helps!
Jeremy Lounds
Focus Enterprises