I just recently came across this faq on the Joomla.org forum from RussW that sums up the often troubling subject of Joomla and server permissions. Its amazing how many issues arise due to poor or incorrect server setups. This issue tends to mainly affect new users since once you've lost a day or a week of your time troubleshooting, you tend not to make the same mistake again.

For new users or old I think this post is certainly well worth taking the time to read, it might end up saving you or your clients a few headaches.