Sorry I've been gone so long, I have read your replies AlecStaar and am STILL reading through your detailed guides!
I have been meaning to properly go through this and update my ghost image but it seems I never get time except when I'm over tired like now

(the questions WILL be coming)

Disable the Server Service... stalls it ALL! At one shot...
Yes but I meant if you want to serve some files, but not others, and you arent using ntfs. (ie can only set permissions in the individual specific network services)
EG: is it best to add your folder to the ftp server and DENY EVERYTHING, or to just not add it at all?
I think you have already answered this actually; It's best to not give any network apps anything to do with folders they shouldn't allow. correct?
locked myself outta my machine, there was no getting around it either... reformat! Alot of my work was lost in that fiasco of my own research!

It is indeed a nightmare that I hope I never experience. You would think that at least us professionals would never do this as 99.9% of the time when people format it was actually recoverable.
I know someone that did that the other day. They managed to recover it though, with the help of some tools purchased from sysinternals/winternals - reset all permissions and recovered some corruption!!!
He said it was the "Restorer 2000 program" not sure if that's exactly the right name though.
Regarding the users/groups/system accounts it is safe to deny, I found that my netbios-guest-readonly shares were not effected when I denied the following permissions to the shared folders:
NETWORK - Deny write
NETWORK SERVICES - Deny ALL
(plus others)
I guess that means SMB/netbios uses the
network service but not the
NETWORK SERVICES service, although I assume other network apps will use the other or both.
Anyway those 2 can't be dangerous to play around with.
I see the reason why the permissions are 'backwards'. It is because a user can be a member of more than 1 group, and therfore allow 'must' take priority over deny. Though I think everyone can see the potential dangers with this method also ('hidden' accounts could be overlooked, people might not have a full understanding of inheritance, priorities, if new accounts are made they would have full access), and it could be improved, but I guess what is done is done, and we should just cope with it

This should be a REALLY good thread, ask all the questions you want to, I will be glad to answer as best I can... this kind of thread needs doing here & I am glad you started it up!
Don't say that! You Jinxed it! 8)
oh well, when it comes to "question time"

I will start a new topic anyway because I took so long
You are right, it needs to be dicussed more.
We can get REALLY specific on your machine if you like, but DO read that document first!
I'm working on it. Don't worry, It won't be too long as I will be the gateway for my LAN soon so I'm going to be forced into it