File level 'r' read and 'w' write permissions are necessary but not sufficient for most things. You must also have the appropriate action right in the [VFS] section of the .ini configuration file to upload, download, delete, rename, etc.
By default normal users (i.e. no '1VM' flags) can't really do much except perhaps into the /Incoming directory if you have created it. Decide what you want them to do and add the 3 flag or whatever default flag users get to the permission list. Upload, Resume, MakeDir, RemoveOwnDir, RenameOwn, DeleteOwn are good possibilities...
You can differentiate why a command is rejected. If it's a mode issue (rwx) you'll get "Permission denied (directory mode)" and if it's an action issue "Permission denied (config file)".
Also, check out the default directory attributes under the [VFS] section as 755 might not be the best choice for directories you create that multiple people are going to upload to. In that case use 777 or something. Remember, the ability to delete other user's files and directories can still be denied by the [VFS] section. It sounds like you did that for existing directories which is probably fine as directories inherit their parent's permissions at the time of creation it will propagate downwards, but just thought I'd mention it.