It looks like there is no way to do what I want with W2K3 permissions. I have a 2K3 server with a folder called Reference. It is shared out to everyone, full control. What we want is to set the permissions so that users cannot create folders within the reference folder. We do want them to be able to create, edit and delete files within the folders.
When I used the special permissions and removed Create Folders / Append Data permission general users could not create folders, but they also could not make changes to existing documents. Is there any way to do what we want?