Permissions issues with xserve 10.6

I've created a sharepoint that is the main folder for all of my users, OfficeShare. I have set up permissions on this folder to allow all users in the office group to be able to read, write , delete , modify etc. I have enabled inherit permission from the OfficeShare folder to be inherited to all of the enclosed folders.

If user1 creates a folder and places files in it, they should be accessible to any of the other 4 users in the Office group. If user 2 goes in and tries to update a file or delete the file or replace the file user 2 gets a message "insufficient priviledges to perform the operation." I can go to the server and do a get Info cmd I can see that only the orginal user has priviledge to that folder. If I force the apply to all enclosed items then user2 can work on the file. I have edited the workgroup permissions to all all operations to the sharepoint.

What options need to be set to allow anyone in the Office workgroup to be able to control any folder or file in the OfficeShare sharepoint?