I created a shared folder on a Windows Server 2003 Machine, and tried accessing it from a remote Windows 7 machine. The user is part of the AD, and the sharing permissions are 'Modify' to everyone. I added the user to a Domain Local group and gave the group NTFS 'Modify' Permission on the folder - the user can't edit content. But when I specifically added the user to the NTFS permissions and gave him 'Modify' - the user could change the content. The group has no other permissions delegating to it. Also I checked the effective permissions on the user when the group had the permissions and he had 'Modify' delegated to him.
I checked with senior admin but he has no idea.