Can’t change permissions – “The parameter is incorrect”

I've experienced similar quirks in AD administration. My config:

2 ReadyNAS 3200 units, both on the latest firmware 4.2.13
Windows 2000 domain (will soon be moving to Win2008R2)
Win XP clients

My experience:
1. I create a share in NAS per instructions found on this site
2. I use Win2000 Server, logged in as administrator to create directories in NAS-created share
3. If I try to change permissions on NAS folder and propogate down it leads to a world of hurt. Found it best to leave NAS folder "as is" and focus on permissions of directories created in Windows.
4. ReadyNAS automatically adds groups/users, "Domain Users", "Everyone", "root (Unix)", "CREATE GROUP", CREATE USER" (though some of these not immediately visible), and set to "This folder only".
5. Sometimes I want my "Domain Users" to have read-execute permissions on all folders within a share and another group to have full permissions. If I try to change the Domain Users permissions at a higher level and propogate throughout it often errors out with "parameter is incorrect." If I try to remove the "Domain Users" group and then re-add it with the permissions I want I get similar results.

My work-around for "Domain Users" issue:
1. Let ReadyNAS set permssions however it wants on it's "share."
2. Create my folder(s) from within Windows under the ReadyNAS share.
3. If I want all "Domain Users" to have certain permissions I first create a group called something like, "All_Domain_Users" and add the group "Domain Users" as a member of the group. Then I assign the group "All_Domain_Users" to my WIndows folder(s) with the required permissions and for "This folder, subfolders and files."
4. It seems that ReadyNAS will still add the users and groups it wants to add, even when I try to remove them and propogate downward so I gave up trying to change them.

I just figured the problems I was having was because we're still on WIn2000. Hope this helps someone.