csny490, thanks for the link but unfortunately I don't have Spatial Analyst.
Thank you too mdenil. It's a great idea that one would expect to work, I should've mentioned that I tried it and had problems.
Here's what I did. I'm working with street segments that are split at each intersection. I turned all the vertices into points. I ran thiessen polygons for those points, then merged the polygons together based on the original line segment ID. That's when I discovered the problem: what happens when turning those polylines into points is that you get a point in the middle of the intersection that belongs to not just one line, but several lines. The thiessen polygon tool creates a polygon around that point the same as any other. But the resulting polygon describes an area that is closer to the intersection than to any other vertex of those intersecting lines. Which is not what I want.
Maybe densifying will make a difference. I haven't heard of that tool before. If I'm imagining it correctly, densify will create extra vertices along the line at a specified interval? That could be useful to shrink those useless polygons down to a tiny size.