The first thing that you need to look at when determining how to set your permission on your windows server is what server are you running and what file system.
FAT32 VS NTFS
The points the apply to webservers will be highlighted in red.
To start off we will jump into an overview of each of these filing systems overall and then move in to the more specific topic of their relation with a web server.
FAT32 is a more advanced version of the more basic FAT (file allocation table). With FAT, DOS writes to the disk in the zero track the information about each cluster. The FAT contains information about each file: the filename, size, date, the date of last modification, file attributes, and the physical location of the begginning of each file. FAT32 uses a 32bit file allocation table, giving several hundred megabytes more starage then older filing systems would allow. In addition to less space being wasted due to large fixed cluster sizes.
NTFS (New Technologies File System) holds all of the capabilities of the FAT and FAT32 filing systems but has a few advantages and extra functionallity. NTFS has the added functionallity of file security. On FAT32 the files permissions are essentially all set to 777 (Linux chmod). This means that the Windowes is giving the local IUSER_computername full control over your virtual directory and anybody has full access to the files on your webserver. Another advantage of NTFS is the fact the it supports disk compression without a third party compression tool. This can become handy with many files being stored on your server, but as far as using your home server for just a testing grounds for your work, then this is not a huge factor. This filing system also supports large hardrive size of up to 2 terabytes. It supports unicode, large file names are not a big deal but some people like it. Disk quotas can be set for different users, limiting the amount of hardrive space they are allow to take up. This can be handy when you set up your IUSER_account and want it to have a limited hardrive space.
to be continued....
Adding ALOT MORE.....just no time now