System basically means operating system and you generally want to give
system full control as it would have by default. Not having the system with
full control possibly can break some things with backups being an example of
a possibility.
If you add "user" or a user account then that user will have full control
over that folder/file which means that the user can read, list, execute,
write, delete, and change permissions. Generally this is considered
excessive permissions for a user other than something like their home folder
or user profile folder. A basic security principle is that of least
privilege which means a user will only have the necessary rights and
permissions to do their job. Then they will be much less likely to
accidentally delete folders/files or install software that they should not -
maybe even a Trojan. The link below explains more on folder permissions.
http://support.microsoft.com/default.aspx?kbid=300691
http://support.microsoft.com/default.aspx?scid=kb;EN-US;308419 --- mostly
applies to Windows 2000 also
Your subject mentions "shared". If you mean network shares then keep in mind
that share permissions work together with folder/ntfs permissions. Share
permissions only apply when a use accesses a share via the network.
Folder/ntfs permissions apply to a local logon or network access. If share
permissions conflict with folder/ntfs permissions for a network user the
most restrictive permission will apply to the user. In other words if a user
has only read access to a share but full control to the folder/ntfs
permissions. That user will only have to read/list/execute access over the
network for the share contents. --- Steve