Sure - just like using a magnetic swipe card, or even a conventional physical key.
http://www.ibutton.com/products/...tml#memory

So the next step up is to use one of the password-protected iButtons, eg DS1991:
http://www.ibutton.com/products/...tml#secure

In this, you store some "key" data in (one of) the secure area(s) - so the sniffer now needs to sniff the iButton's serial number, the password and the additional "key" data.

Because each iButton's serial number is unique, it shouldn't take too long to spot if a key has been "cloned."

If you need even more, then there's the iButtons with SHA1 Challenge-Response Algorithms, and Java-powered cryptographic iButtons.

But, as I keep saying, we're not trying to find the ultimate security system here - just something that is sufficient for Shahzad's requirements.

The original question was actually about how to use iButtons - not whether or not they provided sufficient security (which is impossible to say, as we don't know the criteria).