Yes you can do this within SQL Server. Make the user the owner of the schema, and grant them the control right over the schema. This will give them the ability to grant other users rights to objects within there schema, as well as give them the ability to create objects.
You can also create a seperate database for each user. If you give them each there own database they each have there own physical files so you can more easily keep track of who is using the disk space. To grant a user rights to the database, simply make them the owner of the database.