Hi,
you will have seen that word in some tutorials or scripts you downloaded...
What does it mean: chmod sets access rights on a file, it is specific to unix or similar systems. The windows counterpart is file properties: you can make a file readonly or hidden.
The value specified for chmod is an "octal" number, basically a convenient way of writing three groups of three bits.
The first group is for the file "owner" (you, since you uploaded the file), the second one is for the "group" (some providers might set up a user group for all their customers) nd the remaining one is for all others (on many systems the webserver belongs to "all others")
Each digit is formed by adding / (actually oring) together 1 (execute priviledge for files, scan for a directory), 2 (write priviledge) and 4 (read priviledge)
Unlike windows a file is executable if it gets the execute priviledge (even if the file type suggests a script, it will not execute without the exec bit) and can be made unreadable.
How to do it: if you connect to the unix server via cmdline ftp or even have telnet / ssh access, simply type
chmod VALUE FILENAME
at the shell or ftp prompt. If you are using a graphical ftp client (e.g. cute), right click on a file in the server window and choose properties or permissions.
You may either encounter a numerical entry or a set of checkboxes organized as read / write / execute and owner / group / world.
If you cannot change a mode from the cmdline ftp, chances are that the server does not run unix or has some special setup.
If you are using cmdline ftp or shell access, you will most likely see a directory listing with something like
-rwxr-xr-x before the file name. These are the same codes - three groups of three permissions each. The leftmost group is for the file owner.
Which values to set: rule 1 - if your hosting company has published specific rules, follow them. Rule 2 - never trust tutorials but apply common sense

a) a plain text file (to be read by the server but not written) will usually be stored as 644 - do not change.
b) a text file to be written by the server (e.g. a counter, a guest book) should be changed to 666. You may have to create an initial file, upload that, and change the permission, to get your web app going
c) a directory where the server is allowed to create new files should be set to 777
d) cgi/perl scripts usually should be set to 755 AND have a shebang line (first line reading #!/usr/bin/perl or something similar),
php scripts usually should be left at 644. Both of these settings depend on your hosting company, however: they may run php like a cgi (so you have to set permissions or add the shebang, or perhaps both of them) and they might as well run perl as a module.
Check the faq pages or like. If a hosting company provides a non-standard setup and does not document it, it is a good idea to get hosting from their competitor....
Caveat: you may see scripts that create files and change their permissions via some chmod() function. Make sure you have a leading 0 to designate your permissions as an octal value, otherwise your script will definitely do the wrong thing