Wordpress - How to to secure WordPress file and folder permissions

Hardening WordPress on the WordPress Codex is a very good article on how to secure your WordPress blog, which goes into quite some detail on file permissions, as well as some other methods of securing WP.

Generally, it's never a good idea to have 777 set on anything. Read the links Thomas provided for more detail, but as a general rule 755 for folders and 644 for files is a good practice.