A client had a WordPress theme that made use of timthumb.php to generate thumbnail images on the fly.  If you check the documentation for the script, it tells you to set the permissions for the cache folder to “777″.  This is short-hand for “all users are allowed to read, write, create and execute files in this directory”. This blog post from Chad Coleman provides a rather useful guide for using the script in a WordPress theme. It goes one step farther and tells you to set the permissions for both the cache folder and the script’s containing folder to “777″.

This is bad advice.  The WordPress Codex has an explanation of the dangers of 777 permissions.  Don’t do it.  It may be necessary to use them on some badly configured hosts, but if you run into that situation, get a new host with a competent administrator quickly.

Some web hosts prohibit the execution of scripts that reside in folders with 777 permissions in order to protect their users from such bad advice.  If you are using a WordPress theme that makes use of timthumb.php and are not seeing the thumbnails, I suggest that you alter the permissions of the folder containing the script and the cache folder to at least 755 (only the owner can write/create files in the folder).  Frankly, I think that 600 (owner can write and read, but not execute, no one else has any access) is a good default for anything except anonymous FTP folders.