Way back when (late 2005) Brent (my bad calling him Ben) explained debug perms to me when I had a problem and I saved it so I could have a good explanation when I needed it:

Brent Linden: heheheh
Osprey Therian: evil laughter
Brent Linden: Here's how it works:
Osprey Therian: /me cringes
Brent Linden: B: is Base permissions. That's the most permissive the object ever can be. For a creator, this will always be VMCT.
Osprey Therian: that hussy!
Brent Linden: O: Owner permissions. You own the object, and here is what you can do with it. Typically this is No-mod, no-copy, transfer, moVe (the elusive V). This reads as V T
Brent Linden: G: Group permissions. This is what group members can do with this object. If no group is on the object, it's blank.
Brent Linden: E: Everyone permissions. What can anyone just standing around do with this object. Typically, nothing, but you might set it to Anyone can move (V).
Brent Linden: N: Next owner permissions. This is the important one, as it is most often modified without you really knowing. This takes all the restrictions on the object that are imposed by it, its linked parts, it's contents and the contents of it's linked parts...
Brent Linden: and comes up with how restrictive the object's permissions should be for the next-owner.
Brent Linden: This is *only* done in-world, *on rez*!
Brent Linden: Now here's where it gets REAL tricky!
Brent Linden: If you change the permissions of the object while it's in your inventory, it will appear to have incorrect permissions in your inventory.
Brent Linden: The nasty thing about this is that you can drag that object into the inventory of another object (has not been rezzed yet), someone can buy it (has not been rezzed yet) and then that someone looks in their inventory and OMG the perms are wrong!
Osprey Therian: ah
Brent Linden: However, if they rez it, they will find that the permissions are actually right, their inventory is lying to them
Brent Linden: Case in point: the Falconer avatar (great job, btw!)... the box is full-perms, but the contents of the box are not. When you give that box to someone they see it as full perms, until they rez AND take it.

Still don't know what F is.