Yes, just enable the encryption property on the home directory datasets and not any others.
Since what you want to protect is a users home directory you probably also want to use the pam_zfs_key module so that when you login it will automatically mount up the encrypted dataset using the same (or different) passphrase as your login password.
See the examples in the pam_zfs_key(5) man page for how to configure it.
Edited by: rukbat on Dec 6, 2012 7:18 AM Moderator Action:
I edited the URL to the man page link, for better readability.
(If you wish yo see how it's done, go "edit" your own reply and examine the text. Then exit the edit session to leave it be.)