I'm trying to install Squirrelmail and for some reason it's just not working, this seems real stupid but I have no idea why its not working.

I'm getting the error:

Error opening ../data/default_pref
Could not create initial preference file!
/usr/local/squirrelmail/data/ should be writable by user apache
Please contact your system administrator and report this error.

I'm pretty sure the directory is right (Hell, i've even chmod 777'd the folders and it still doesnt work...)

deimos squirrelmail # pwd
/usr/local/squirrelmail
deimos squirrelmail # ls -lah
total 32K
drwxr-xr-x 4 root root 4.0K Jan 12 03:15 .
drwxr-xr-x 13 root root 4.0K Jan 12 03:15 ..
drwxrw---- 2 apache apache 4.0K Jan 12 03:15 data
drwxrw---- 2 apache apache 4.0K Jan 12 03:15 temp

Does anyone know any other reason that would stop this from working?

If you're using Centos as in your profile, then it should be SELinux preventing writing
I'm not an expert on SELinux, but according to this, you need
BTW for apache to work without problems you need the directories to have 755 attributes:

heh well sure enough, looks like it was SELinux preventing this. I just reformatted and vaguely remember doing this last time around too