In addition to the standard permissions (rwx), there are 3 special permissions that can be set for a file or directory: suid, sgid, and sticky bit.

suid -- this special permission allows the file to be executed with the security permissions of the file owner instead of the permission of the user who ran the program. This can be a source of security problems. Some daemons run as suid root. The suid permission is seen as an "S" in the user executable position a long directory listing (ls -l). Has no effect if the file is not executable.

To set the suid permission:
chmod u+s filename

sgid -- this special permission allows the file to be run with the security permissions of the group instead of the permission of the user who ran the program. This can be a source of security problems. The sgid permission is seen as an "S" in the group executable position a long directory listing (ls -l). Has no effect if the file is not executable.

To set the sgid permission:
chmod g+s filename

Note: If sgid is set on a directory, any file created within that directory will have the same group owner assigned as the directory. Useful when a group of users is sharing the same directory.

sticky bit on a directory -- Prevents any files in a directory from being deleted by anyone but the owner of that file. Often used on the /tmp directory. Good to prevent accidental deletions by rm * commands. The sticky bit is seen as a t in a long directory listing (ls -l). Setting the sticky bit on a file is ignored by Linux.

To set the sticky bit:
chmod o+t dirname