WPA does not allow computers on the same network to talk to each other the same way they do on an unencrypted network.
That's actually a router function, independent of WPA. WPA will prevent someone who doesn't have the access password from sniffing traffic, but an authenticated user
may be able to do so, depending on the router setup. For a router running DD-WRT firmware, the setting is called "AP Isolation," and blocks wireless-to-wireless traffic when turned on.