Setting up access points for public access

Okay, here's the situation. I have a PowerMac G4/1.25GHz dual processor running Server X 10.3.9 with four Mac clients (a small law office). Up until recently, everyone had also been running (client) 10.3.9, but I started upgrading some of them to 10.4 (currently 10.4.5). When I did this, they started running into problems with Word sometimes giving a "network or file permission error" when attempting to save documents to the server. After weeks of posting questions to Word support and trying everything in the book that I could think of, I found Apple recently posted what appears to be the answer to this (article 302979, "Microsoft Office applications fail to save to a server volume." The problem? I have all four users logging into the same account on the server, and when one of them logs out, it zaps everything in a Microsoft-created temp folder on the server, including temp files created by open documents created by other clients. Sheesh.
I had everyone set to use the same account because they have no need of document security -- everyone should be able to get into everyone else's files on the server, period. So, because of this snafu, I've created separate accounts for each of the users. My problem now is that, if user "X" creates a file or folder on the server, user "Y" cannot modify it because it is created as read-only. Strangely, if someone modifies an existing file, it doesn't change the user rights at all -- not sure why.
I'll admit to being a bit of a novice with Server X but am familiar with parent/child folder permissions -- I think I've got everything set right, but I must obviously be missing something. Here's what I've got setup, and what I've tried. If anyone can point out how I've got this setup improperly, I really need to get this fixed... thanks.
I have a single sharepoint ("workfiles"). I used the "public" folder as an example, and set the owner to "root" and the group to "staff". Further, I set the owner, group and everyone privileges to "read & write". I've also tried setting the group to "admin". All the individual user accounts I've set are also setup as admin users. I've tried setting each users's primary group as "staff (20)" or "admin (80)". I've copied all these privileges to all enclosed items, which does reset everything to public access, but as soon as someone creates a new folder or file, that folder/file becomes private to that user (it shows up with the creator's username as "owner" (r&w), group as "admin (read-only), and others as "read-only" as well.
PS: If upgrading the server to Server X 10.4 would help, I'm sure I can arrange that.

In our law firm, the server (10.4.4), we have set access to read/write access so staff can open client files/folders, edit then and close, etc. That seems to be working okay. Before the tech worked on permissions, if someone created a letter another staff member could open it, but it was read-only.
The problem we are having is that if a file that is clicked on stationery pad and we want to edit it, it will not allow us to. For example, if we need to edit our letterhead that normally comes up as an untitled document, if I unclick the stationery pad box, it unclicks, but it still comes up as an untitled document. I even tried to unclick a stationery pad on a document that I created before the server upgrade and it wouldn't let me.
If I create a brand new document and put it on stationery pad, it comes up untitled as it should. If another user on another desktop wants to make changes, they unclick the stationery pad box, but when they open it, it comes up untitled and in checking get info, the stationery pad is selected.
The tech set it up as follows:
Share Points and All tabs:
General tab: box to share this item and its contents is clicked
Access tab: owner, group and everyone have read/write privileges
If select dial at bottom to propagate permissions, all boxes are checked, except for access control list, which is shaded.
I cannot drag/add anything to the control list and the pencil and the minus sign is shaded
Protocol tab: Both boxes, share item using AFP and Allow AFP guest users are clicked. But for better security in reading the article, this should be unchecked.
Also under the protocol tab: the inherit permission from parent radio dial is clicked, not the use standard POSIX behavior.
What are we missing?
Thanks, Cheryl

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