File permissions are what tell the server who it should let view/run/change a file. The first number is for "user", the second is for "group" and the last is for "others". 4 is "read, 6 is "read/write" and 7 is "read/write/execute". Execute means "run" in plain terms. To change them you just right click the file or directory in your ftp program (you DO have an FTP program right?) and then click properties or "CHMOD" and set it to what you need.

What does this mean to you? Well the main thing you need to know is if a directory is set to 777 then a program can write to it.. if a file is set to 666 then a program can change it. So if a @#$! hacker gets a file on your server through sneaky means (or even on another person's account on shared hosting) he can write to those directories and change those files! It is a GOOD idea to always have an .htaccess file in those directories just incase.