By default, Windows 2003 assigns Full Control permissions to the Administrators group and the System group to any NTFS volume, which are also inherited by the folders and files in it. The Users group is assigned Read & Execute, List Folder Contents, and Read permissions. Users or groups who need to write and or modify files and folders will need additional permissions.
The above list describes what the NTFS permissions ‘allow’, but you can also explicitly deny the permissions to users. Denying permissions is usually only done to make an exception. For example, you could allow Modify permission for the Sales group and deny the same permission for certain user account in the Sales group for whom you want to make an exception.
Allow permissions are cumulative, which basically means the least restrictive permission becomes the effective permission. For example, John is a member of the Sales group and the Management group. Sales has been allowed Modify permissions for the folder SalesReports. Management has been allowed Read permissions for the same folder. Since John is a member of both groups, his effective permission in this case is Modify. The following table lists some more examples. Note that the listed permissions in these examples are ‘allowed’.
User Permissions Sales Group Management Group Effective NTFS Permissions
John Full Control Read Modify Full Control
Lisa Read Write Read Write
Bob Write Modify Read & Execute Modify
Alice Read Read Full Control Full Control

Configuring NTFS Permissions
There are several different ways to assign NTFS permissions but the most common way is to use Windows Explorer or My Computer, right-click a file, folder, or volume, click Properties and then the click on the Security tab. Under Group or user names on the Security tab, select or add a group or user. Then at the bottom allow or deny one of the available permissions.

By default, when you add a user or group to the list in the dialog show above, this user or group will have Read & Execute, List Folder Contents, and Read permissions.
File permissions override folder permissions. For example, if user David has been allowed Read permissions for the folder and Modify permission for a file work.doc, his effective permissions for the work.doc file is Modify. The exception to this rule is the permission Full Control on folders. Groups or users that have Full Control for a folder can delete files and subfolders in it regardless of the permissions set on those files and subfolders.
In addition to the permissions listed in the tables above, you can also assign special permissions by clicking the Advanced button on the Security tab to open the Advanced Security Settings dialog with the Permissions tab opened as displayed in the following screenshot. Here you can add, remove, and edit the permissions for users on a more granular level.

Permission Inheritance
Besides explicitly assigned permissions on a file or folder, it may inherit permissions from its parent folder (up to the root folder, which is the volume itself). By default, permissions set on a folder are automatically inherited by all files and subfolders in it. This simplifies administration but is not always desired.
In the image above, you can see the following two options:
Allow inheritable permissions from the parent to propagate to this object and all child objects. Include these with entries explicitly defined here.
When this option is cleared, the file or folder will not inherit permissions from the parent folder.
Replace permission entries on all child objects with entries shown here that apply to child objects.
This option will actually reset the permissions on child objects (files and subfolders) to make sure they inherit the permissions from this folder and those permissions are not overridden by permissions explicitly assigned on child objects.
In some situation you may want to inherit most of the permissions from the parent, but make an exception for one or more users/groups. In that case you should set the opposite permission of the one that is inherited. For example, if James inherits Modify permissions from a parent folder through group permissions, you could deny Modify permissions for James on the child object to prevent inheritance for James only and still allow Modify access to the rest of the group.
Effective Permissions
On the Effective Permissions tab of the Advanced Security Settings for a file or folder you can select a user or group and see the effective permissions. These are the results of the permissions directly assigned to the file or folder and permission inherited from parent folders.
Change ownership of files and folders
When a user creates a file or folder Windows 2003 automatically assigns Full Control permissions to the creator/owner. This allows the user to assign permissions to other users for the files he or she creates. This means that besides the ACL, files and folders need to include information about who owns the file. By default, this is the account who creates the file or folder or the Administrators group. For several different reasons, the ownership of a file or folder may need to change. For example, if a user leaves the company, the ownership of his or her files and folders may need to be transferred to other users.
You can take ownership of a file by replacing the owner with your own account or with one of the groups you are a member of. You must have Full Control or the special permissions Take Ownership to be able to take ownership of a file or folder. Users who has the Restore files and directories privilege can assign ownership to any user or group.

Moving and copying protected files
Moving and copying NTFS protected files is similar to moving and copying compressed file. When you copy a protected file to a folder on the same, or a different volume, it inherits the permissions of the target folder. When you move a protected file to a different NTFS volume, the file inherits the permissions of the target folder. A move between volumes is actually considered a copy; the source file is deleted after it is copied to the target volume.
However, when you move a protected file to a different location on the same volume, the file retains its permission. When data is moved within the same volume, the data is not actually relocated, the pointer to it is merely changed and that is why it retains the ACL. In all cases the target volume needs to be a NTFS volume as well because as mentioned earlier, FAT, FAT32 and other file systems do not support NTFS file and folder permissions.
Shared Folder Access
A shared folder (commonly referred to as a share) is a folder or entire volume that is published on the network and can be remotely accessed by other users. The shared folder can be used as if it were a local folder; to store data, and even to run applications from the share over the network. Members of the built-in group Administrators, Server Operators and Power Users can share folders. If the shared folder is located on an NTFS volume, users need at least the NTFS permission Read for the local folder to be able to access it, regardless of the share permissions assigned to it. Following are some of the common methods for creating shared folders:
1. Using the Shared Folders snap-in, which is included by default in the Computer Management console. In the console tree, click Shares (below ComputerManagement|System Tools|Shared Folders). On the Action menu, click New File Share. You will be prompted to select the folder or drive, enter the share name and description, and set permissions.
2. Use the net share command at the prompt: net share sharename=drive:path
3. In Windows Explorer/My Computer right-click the folder or drive, click Properties and then the Sharing tab. Enable the option Share this folder, enter a name for the share, a description and configure other settings as depicted in the following image.

Users can connect to a share in several ways, for example:
1. Use My Network Places/Windows Explorer a user can browse to the share or use the Add Network Place wizard to create a shortcut.
2. Use a direct UNC path, for example: //FileServer12/ShareX
3. Use My Network Places/Windows Explorer or the net use command to map a drive letter to a share.
By default, Windows 2003 creates the following hidden administrative shares depending on the configuration of the server:
Admin$ This is the system root, usually C:\Windows, Administrators are assigned Full Control share permissions.
C$, D$, E$, etc. Each volume on a hard disk is shared by default and provide easy access of the entire volume to Administrators. Administrators are assigned Full Control share permissions.
IPC$ A system share that allows named pipes connections for communication between applications and other computers.
Print$ This points to the %systemroot%\System32\Spool\Drivers folder, and is created when printers are shared to allow clients to automatically download the printer drivers.
Fax$ A system share used by fax clients.
You can create hidden shared folders yourself by adding a $ sign to the end of the share’s name. Hidden shares do not show up when users browse the network through My Networks Places for example. To access these hidden shares, users need to enter the name including the $ sign. NETLOGON and SYSVOL are two other administrative shares that exist on domain controllers, but they are not hidden.
Shared Folder Permissions
There are three different share permissions that can be assigned to groups and individual user accounts. These permissions apply only when connecting to the share over the network. The share permissions do not apply to users who log on to the local machine. The following share three permissions are available for shared folders:
READ
Allows user to read files and list the contents of folders and volumes. This allows executing applications as well. The default for new shared folders is Read permissions for Everyone.
CHANGE
Allows the same as Read and allows the user to modify, create and delete files and subfolders.
FULL CONTROL
Allows the same as Change, but additionally allows the user to modify permissions.
Whether the permissions actually allow the desired access depends on the NTFS permission of the shared folder and the file subfolders in it. For example, if a user has the share permission Change for a shared folder, that user will not be able to actually change files for which the user has only Read NTFS permissions. We will go over some more examples in the following section “Combining Shared Folders with NTFS Permissions”. However, you can create share folders located on a FAT or FAT32 disk and assign share permissions to provide protected access for users that connect to the shared folder. Remember that share permissions are only used when a user connects to the shared folder from a remote computer. So if a user logs on locally to a computer with a FAT/FAT32 drive, the share permissions are ignored.
To configure share permissions in Windows Explorer/My Computer right-click the folder or drive, and then click Properties and then the Permissions button on the Sharing tab. Under Group or user names: select or add a group or user, and allow or deny one of the permissions listed in the table above.

When you set permissions, you can either Allow or Deny them to a user or group. Typically you would allow a group share permissions and deny the same permissions to certain members of that group. The default permissions for new shared folders is Read to Everyone. Whether Everyone will actually be able to read depends on the NTFS permissions.
Combining Shared Folders with NTFS Permissions
When you combine NTFS permissions and share permissions the most restrictive effective permission counts. For example, if you create a folder with files and assign them Full Control NTFS permissions to Everyone and share the same folder and assign the share permission Read to Everyone, users connecting through the network will have Read permissions.
Probably the most common mistake made when combining share permissions and NTFS permissions is to add them all to a single pile and then take the most restrictive. Instead, you need to determine the effective share permissions amd the effective NTFS permission before taking the most restrictive.
So to determine what the permissions are for a user connecting through a shared folder to a local folder protected with NTFS permissions you need to do the following:

1. Determine the ‘effective’ NTFS permissions
2. Determine the ‘effective’ share permissions
3. Take the most restrictive of these two.
Following is a practice questions that raised discussion in our forums several times:
X. You share a folder on your computer and you assigned the share permission Change to Everyone. John, a user from the Sales department, has been granted Full Control NTFS permission to the folder. John is also a member of the Sales group, which has been assigned Read NTFS permissions. What are John’s effective permissions when connecting to the shared folder?
a. Read
b. Read & Execute
c. Change
d. Full Control
The correct answer is c. Change, but many people seem to be inclined to choose answer a. Read instead because Read is the most restrictive permission. However, it is the most restrictive effective permissions that counts.
1. Determine the effective NTFS permissions:
As mentioned earlier in the NTFS permissions section, NTFS permissions are cumulative. This means the least restrictive applies when considering only NTFS permissions. In this case, this means John has Read NTFS permissions for the folder through the Sales group, and Full Control NTFS permission through his own account, hence his effective NTFS permissions is Full Control.
2. Determine the effective share permissions:
The question only mentions that the share permissions are Change to Everyone, so no other share permissions have been explicitly assigned for the Sales group or John and hence the effective share permission is Change.
3. Take the most restrictive of these two:
The most restrictive of the previous two effective permissions is Change. Although John has Full Control NTFS permission for the folder, he is accessing the folder through a shared folder for which he only has Change permissions.
Troubleshoot access to files and shared folders
Problems accessing shared folders are often caused by underlying network connectivity problems. Before you scratch yourself a bold spot trying to find an incorrectly configured ACL or Shared Folder, make sure you check basic network connectivity, ping the file server by name, check if the user is properly logged on to the domain, etc.
Probably the most common cause of problems with accessing files and shared folders is an incorrect configuration, so when things are not working as expected you should verify the configuration. A user that is not able to access a file or folder maybe a member of a group who was recently denied certain permissions. Configuration changes of permissions assigned to a parent folder my also cause problems through inheritance.
The Effective Permission tool on the Advanced Security Settings dialog provides an easy method to determine the NTFS permissions, but it does not include share permissions. I n large environments with many users and groups, it can be hard to determine the effective share permissions so it is important to maintain a structured user and group design and folder hierarchy. The following link points to document with Best practices for Shared Folders.
The Shared Folders snap-in, included by default in the System Tools of the Computer Management console, provides an overview of the Shares configured on the local computer, the active Sessions, and the currently Open Files. These can provide valuable information when troubleshooting access to shared folders.

                                   

Implementing and Conducting Administration of Resources

FILE SYSTEMS    

Windows XP support the following file systems:

FAT   

Disks formatted with the FAT file system can be accessed by MS-DOS, all versions of Windows, and OS/2. The maximum supported volume size is 4 GB, the maximum file size is 2 GB.

This file system should only be used on removable media such as floppy disks and hard disks smaller than 512 MB.
FAT32    

The faster file system FAT32, is often used in multi-boot situations with operating systems that do not support NTFS. Disks formatted with the FAT32 file system are supported by

Windows 95 OSR2, Windows 98 and ME, Windows 2000, and Windows XP. Windows NT 4 and earlier cannot access FAT32 volumes. The maximum supported volume size for FAT32 is 2 TB, but

Windows XP can format up to 32 GB only. The maximum file size is 4 GB. The minimum size for a FAT32 volume is 512 MB. You cannot format removable media such as floppy disks with

FAT32.
NTFS    

Disks formatted with NTFS version 5 can only be accessed by Windows NT 4.0 with Service Pack 4 or higher, Windows 2000, and Windows XP. NTFS supports a volume size over 2 TB and

the maximum file size is limited only by the available free space. You cannot format removable media such as floppy disks with NTFS. Besides being able to handle large disks,

NTFS is the preferred file system for Windows 2000 and XP because of the extra features it offers, including:
- File and folder permissions – (discussed below)
- File and folder compression – (discussed below)
- Encrypted File System (EFS) – (see EFS TechNotes)
- Disk Quotas – Allows quotas to be assigned to users for disk space usages per volume. Quotas are only available on NTFS volumes and can be enabled and configured on the Quota

tab on a volume’s Properties sheet.
CDFS   
This is the file system used on compact discs. You cannot format regular disks with this file system.
Converting File Systems 

You can convert FAT file systems to NTFS using the following command: convert c: /fs:ntfs
The convert utility cannot be used to convert from NTFS to another file system. For example if you converted a FAT32 partition to NTFS and you want to revert it back to FAT32,

you will have to create a full backup, reformat the drive with FAT32, and restore the backup.
FILE AND FOLDER COMPRESSION    

NTFS Compression    

NTFS Compression allows compression of individual files and folders, as well as entire NTFS drives. The process of compression and decompression is transparent to the user. For example, when a user opens a document from a NTFS compressed disk, the document is decompressed automatically, when the user saves the document it is compressed again. This

process might decrease your computer’s performance; it’s best to compress static data and only if it really saves space, you don’t want to waste CPU cycles compressing a ZIP

file for example. An NTFS-compressed file cannot be encrypted, and an encrypted file cannot be compressed. If you do enable compression for an encrypted file, the file will lose

it’s encryption attribute before it is compressed.

You can enable compression for a volume when you format it. To enable compression on an existing volume, right-click it and choose Properties from the context menu, on the

General tab enable the option Compress drive to save disk space. To compress a file or folder, right-click it and choose Properties from the context menu, click the Advanced

button and below Compress and Encrypt attributes enable the option Compress contents to save disk space. When you enable compression on a folder or volume, Windows will ask if

you want to enable compression for all the files and subfolders in the folder or volume as well. Besides using Windows Exporer, you can also use the command compact to compress

or decompress a file or folder.

When you copy a compressed file to a folder on the same, or a different volume, it inherits the compression state of the target folder. This works also vice versa; when you copy

an uncompressed file to a folder with compression enabled, the file will inherit the the target’s compression state and thus it will be compressed.

When you move a compressed file to a folder without compression on the same volume, the file retains its compression attribute. When data is moved within the same volume, the data is not actually relocated, just the pointer to it, this is why it retains the compression attribute. When you move a compressed file to a folder without compression on a different NTFS volume, the file inherits the compression state of the target folder. If the target is not compressed, or is a FAT or floppy disk, the file will be uncompressed.

A move between volumes is actually considered a copy; after the source file is copied to the target volume the source file is deleted.

By default, compressed files and folders are displayed in a different color, you can change this by choosing Folder Options in the Tools menu of My Computer/Windows Explorer.

Click on the View tab and enable the option: Show encrypted or compressed NTFS files in color.
Compressed (zipped) Folders   

A new feature introduced in Windows XP is Compressed Folders. These are ZIP files that can be used like regular folders, with some limitations and some advantages. The main limitation is that many programs can’t be run directly from the ZIP file because they might depend on files outside the Compressed Folder. Also you cannot save files to a compressed folder (zip file), you have to use drag and drop or copy and paste. Some advantages of Compressed (zipped) Folders are that they can easily be transported on removable media and the Internet, they can be used on FAT partitions, and they can be protected with a password. Compressed Folders are not available on Windows XP 64-Bit Edition.

The easiest way to create a Compressed Folder is by right-clicking the desktop, point to New, and then select Compressed (zipped) Folder. You can also use the File menu in My Computer. A Compressed Folder is represented by a Folder icon with a zipper.
NTFS FILE PERMISSIONS    

One of the main reasons to use NTFS is the possibility to assign permissions for individual files and folders. Each file and folder on an NTFS volume contains an Access Control List (ACL). This list is filled with entries for groups and individual user accounts and their corresponding permissions. When a user tries to access a resource, Windows XP checks the ACL if the user is listed and what level of permission is assigned.

The following permissions can be assigned for files and folders:

Read  Allows user read files and list the contents of folders, subfolders and volumes, including the attributes, permissions and ownership of the files.
Write Allows the same as Read and additionally allows the user to modify and create files and (sub-)folders as well as changing attributes.
Read and Execute Allows the same as Read and additionally allows users to run applications.
Modify  Same as Read plus Write and and additionally allows executing applications as well.
Full Control Allows everything permitted by the other permissions and and additionally a user with Full Control can change permissions and take ownership of file. 

For folders only, the following additional permission can be assigned:

List Contents  Allows user to read files and list the contents of folders and volumes, user with this permissions can only see the files and folders, not read or change them.

To assign NTFS permissions in Windows Explorer/My Computer, right-click a file, folder, or drive, and click Properties and then the Security tab. If your computer is not a member of a domain, you have to disable the option Use simple file sharing on the View tab of Folder Options before you can see the Security tab.

Under Group or user names: on the Security tab, select or add a group or user, and allow or deny one of the permissions listed in the table above. Denying permissions is usually only done to make an exception, for example, you could allow Modify permission for the Sales group and deny the same permission for certain user account in the Sales group.
 

When you share a folder, you can set a User limit to set a maximum amount of users that can connect to the share simultaneously.

There are three different share permissions that can be assigned to groups and individual user accounts. These permissions apply only when connecting to the share over the network. The share permissions do not apply to users who log on to the local machine. If you want local security use NTFS file and folder permissions.

Share permissions:
Read Allows user to read files and list the contents of folders and volumes. This allows executing applications as well.
Change Allows the same as Read and allows the user to modify and create files and folders.
Full Control
 Allows the same as Change and allows the user to modify Share permissions as well.

When you set permissions you can either Allow or Deny them to a user or group. Typically you would allow a group share permissions and deny the same permissions to certain members of that group. The default permissions for new shares is Read to Everyone.

When you combine NTFS permissions and share permissions the most restrictive permission counts. For example, if you create a folder with files and assign them Full Control NTFS permissions to Everyone and share the same folder and assign the share permission Read to Everyone, users connecting through the network will have Read permissions.

To assign share permissions in Windows Explorer/My Computer right-click the folder or drive, and then click Properties and then the Permissions button on the Sharing tab. Under Group or user names: select or add a group or user, and allow or deny one of the permissions listed in the table above.

By default, Windows XP creates several hidden administrative shares:

Share Purpose
Admin$ This is the system root, usually C:\Windows, Administrators are assigned Full Control share permissions.
Print$ This is the %systemroot%\System32\Spool\Drivers folder, this folder is created when printers are shared to allow clients to automatically download the printer drivers. Administrators and Power users are assigned Full Control share permissions, Everyone is assigned Read permission.
C$, D$, E$, etc.
 Each volume on a hard disk is shared. to provide easy access of the entire volume to Administrators. Administrators are assigned Full Control share permissions.

You can also create hidden shares yourself by adding a $ sign to the end of the share’s name.

Users can connect to a share in several ways, for example:
1. Using My Network Places/Windows Explorer you can browse to the share or use the Add Network Place wizard.
2. Using a direct UNC path, for example: //FileServer12/ShareX
3. Using My Network Places/Windows Explorer or the net use command to map a drive letter to a share.

Offline Files     

Offline Folder allows user to cache the contents of a share and make it available offline, so they can access the files and some programs, even when they are not connected to the network. To allow a shared folder to be cached offline, in Windows Explorer/My Computer right-click the folder or drive, click Properties and then the Caching button on the Sharing tab.

If you enable the option Allow caching of files in this shared folder you can choose one of the following three settings:

Manual caching of documents This is the the default setting when you enable caching. Users will be able to manually select the files they want to make available offline.
Automatic caching of documents Each file that is opened from this share will automatically be copied to the Offline Files folder.
Automatic caching of programs and documents
 This setting allows caching of files that are read-only such as program files.
To enable and configure the Offline Files feature on a client computer, from the Tools menu in My Computer choose Folder Options and click the Offline Files tab. Here you can disable/enable Offline Files, configure synchronization at logon and/or logoff, enable encryption for all offline files, and set the maximum amount of disk space used for offline files (default is 10% of drive space). When you click the Advanced button, you can also view and delete the offline files, and configure what action should be taken when the network connection is lost.

Before files are actually cached on your client, you need to select the shares you wish to make available offline. You can do this simply by right-clicking a drive mapping, and choosing Make available offline.

 Printing
Covers Windows XP local and network printing. Creating, configuring, sharing, securing and connecting to printers.

 Desktop Environment
Covers User Profiles, multiple langauges and locations, local settings and Windows Installer packages.

 Storage
Covers storage types, dynamic and basic, spanning, striping, removable media and disk management tasks.

 Backup, Restore, Repair, and Recover
Covers Backup, Restore, System State Data, ASR, System Restore, Safe Mode, Last Know Good, Device Driver Roll Back and more.

 Devices and Drivers
Covers Device Manager, display devices, ACPI, driver signing, multi-processor configuration, and installing various I/O devices.

 Introduction to ADS
Covers Windows 2000 Active Directory basics and terminology.

 Remote Assistance and Remote Dekstop
Covers Remote Assitance and Remote Dekstop, invitations, offers and troubleshooting.

 Internet Connection Sharing (ICS) and Internet Connection Firewall (ICF)
Covers Internet Connection Sharing (ICS) and Internet Connection Firewall (ICF).

 Internet Information Services (IIS)
Covers Internet Internet Information services, home directories, virtual directories, web sharing, permissions and troubleshooting.

 Encrypted Files System (EFS)
Covers Encrypted File System (EFS), Recovery Agents, and CIPHER command.

 Auditing *NEW*
Covers local Audit Policy and Event Viewer’s security log configuration.

 Performance *NEW*
Covers memory, processor, disk, and application performance, Task Manager, System Monitor and Performance Logs and Alerts, Disk Defragmenter, Scheduled Tasks, and Visual Effects.

 Local User and Group Accounts *NEW*
Covers Local Users and Groups, account settings, account policies, and user rights assignment.

 Internet Explorer *NEW*
Covers Internet explorer security settings and access to resources. 

This is from http://www.techexams.net/technotes/xp/administration.shtml