Windows file permissions problems

We have an Xserve G5 that was running Server 10.3. I upgraded it directly to Server 10.5. Since then, I am having problems with some of our Windows users.
When they create a new folder, it puts them as the owner, but gives them NO rights. I am using ACLs to give full rights to the group that needs access, and also setting the POSIX group rights to read/write. So once they leave that folder, they can no longer get back in. I have SMB set to inherit rights from the parent, and the ACL is set to inherit as well. Other people in the group can access the folder, just not the owner! I change the owner permissions and all is well (for that folder at least). How do I need to set SMB so it follows the inheritance I set?
Once I have the folder set correctly, any new files created there have the POSIX group set to read only. The ACL inherits properly and still has full control. The owner is set correctly, usually. It is not consistent.
Once someone creates a file in any folder, if a Windows user modifies a file someone else created, it changes the owner name and gives them no rights. It also creates a new ACL record. If the original owner was a Mac user, it creates a new explicit ACL with all rights except execute and delete. If the file has ACL records already, it duplicates them and gives whatever rights it feels like (it seems). One new record may say Allow Delete only, and the next one say Allow Read except for execute. The only thing for certain is it will never match the original ACL. It always adds the new ACLs at the top of the list, and the duplicates are grayed out as if they were actually inherited that way. The most 'popular' file I've found so far had 128 "inherited" ACL records!
It is also denying access to some folders that the user has the correct permissions for. For instance, I can create/modify/delete files logged in on the Mac side, but when I log in on Windows, I have problems accessing files/folders. It shows everything as read only. Even if I change the properties in Windows, it will revert back to read-only when I apply the change.
We have a new Xserve that we will be moving the file services to. At that time, all the Windows users will be moved completely to the Mac side - currently the Windows users are accessing the Xserve and a Novell server.
Thanks in advance for any help.

Hi Thy,
Based on my research, the Trusted Installer is a service, for those resources which only allow Trusted Installer to modify, neither Administrator nor System can modify them.
I am wondering that how secure the network and physical environment is that you need to create a GPO to prevent users making permissions changes on system files. These system files normally only can be modified by Administrators,
System or Trusted Installer, which is secure enough when we don’t add users we don’t trust enough to Administrators group.
>What is the best way to undo this while leaving the audit failures turned on and still retaining the correct permissions on all the files?
As long as administrators on these machines are qualified, you can remove the Group Policy. If not, please don’t make any user you don’t trust as Administrator.
>What happens to the files that aren't owned trustedinstalled than now have the trustedinstaller default permissions under system32 and syswow64 if I were to remove the gpo?  What file  permissions would be retained?
We should keep the default permissions, if those files weren’t owned by Trusted Installer before, we should change the original owner back, vice versa.
Here are some related articles below I suggest you refer to:
New ACLs Improve Security in Windows Vista
http://technet.microsoft.com/en-us/magazine/2007.06.acl.aspx
SYSK 277: How-To Bring Back the TrustedInstaller
 http://blogs.msdn.com/b/irenak/archive/2007/01/30/sysk-277-how-to-bring-back-the-trustedinstaller.aspx
Best Regards,
Amy

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