JSI Tip 1114. "Error invoking the security editor" when modifying share permissions.

You receive the subject error, even though you are logged on as a member of the Administrators Group.

You don't have any difficulty setting NTFS permissions (or auditing or taking ownership).

This problem is symptomatic of a missing or corrupt Acledit.dll from the %systemroot%\system32 folder.

Copy the file from your latest Service Pack, other server (at same Service Pack level), or the installation media.