Is it possible to set permissions to folders inside Document Lib's? I've noticed that permissions are only set no Sites without the option to set them to folders or files within them.
No it is not possible to set permissions on a folder within i a Document Library.
A Folder is treated as an item and sharepoint (WSS v2) does not support "real" item-level permissions.
All permissions are set on Document Library and List level.
The next version of WSS v3 should have this kind of item-level permissions.
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