Troubleshooting MS Web Browser

I am trying to run my site on a new Windows 2012 / IIS8 VPS. Visual studio can connect and create directory structure and then crash. Looking at the server logs I am getting the error described in the following link - scroll down.

http://www.iis.net/learn/publish/troubleshooting-web-deploy/troubleshooting-common-problems-with-web-deploy

5/12/2011 11:31:41 AM) An error occurred when the request was processed on the remote computer.
The server experienced an issue processing the request. Contact the server administrator for more information.
This particular error does not give you much to go on, but the picture becomes much clearer if you look at the Web Deploy error log in Event Viewer.
User: DEPLOYSERVER\User1
Client IP: 192.168.0.203 
Content-Type: application/msdeploy
Version: 8.0.0.0
MSDeploy.VersionMin: 7.1.600.0
MSDeploy.VersionMax: 7.1.1070.1
MSDeploy.Method: Sync
MSDeploy.RequestId: 63b2f3d1-1817-444f-8280-9fa4f6f85d53
MSDeploy.RequestCulture: en-US
MSDeploy.RequestUICulture: en-US
Skip: objectName="^configProtectedData$"
Provider: auto, Path:
Tracing deployment agent exception. Request ID '63b2f3d1-1817-444f-8280-9fa4f6f85d53'. Request Timestamp: '5/12/2011 9:31:41 AM'. Error Details:
System.UnauthorizedAccessException: Attempted to perform an unauthorized operation.
at System.Security.AccessControl.Win32.SetSecurityInfo(ResourceType type, String name, SafeHandle handle, SecurityInfos securityInformation, SecurityIdentifier owner, SecurityIdentifier group, GenericAcl sacl, GenericAcl dacl)
at System.Security.AccessControl.NativeObjectSecurity.Persist(String name, SafeHandle handle, AccessControlSections includeSections, Object exceptionContext)
at System.Security.AccessControl.NativeObjectSecurity.Persist(String name, AccessControlSections includeSections, Object exceptionContext)
at Microsoft.Web.Deployment.FileSystemSecurityEx.Persist(String path)
at Microsoft.Web.Deployment.SetAclProvider.Add(DeploymentObject source, Boolean whatIf)
at Microsoft.Web.Deployment.DeploymentObject.Update(DeploymentObject source, DeploymentSyncContext syncContext)
at Microsoft.Web.Deployment.DeploymentSyncContext.HandleUpdate(DeploymentObject destObject, DeploymentObject sourceObject)
at Microsoft.Web.Deployment.DeploymentSyncContext.SyncChildrenOrder(DeploymentObject dest, DeploymentObject source)
at Microsoft.Web.Deployment.DeploymentSyncContext.ProcessSync(DeploymentObject destinationObject, DeploymentObject sourceObject)

      

        
        
        
      

    

To fix this, they suggest the following:

From this, we can see that User1 does not have rights to set security information. In this case, the user does not have Modify permissions on the content. Granting "Change Permissions" to the content resolves the problem.

      

        
        
        
      

    

What is meant by "Granting" change permissions? "? I assumed they meant file permission, so they gave read / write / change permissions to the website directory structure, but I still get the error.