K i'm not an expert but this is what I know:
First of all, root ALWAYS has a UID of 0.
When u add a user they get a UID (User ID) i.e. 500
You are also part of a group - as a default its your username. (GID might be also be 500)
That information is all stored in /etc/passwd along with your home directory and encrypted password.
When you logon or a program needs to authenticate you it checks /etc/passwd for an entry and when you enter a password it is encrypted and compared to that of the /etc/passwd entry.
Thats basically it, file permissions are basic, they are based on username and pasword but alsoo permission bits (i.e. you might do an ls -l foo and get get the following)
[ammullan@daemon ~]$ ls -l | grep foo
-rwxrwxr-x 1 ammullan ammullan 11954 Feb 14 20:59 foo
The -rwxrwxr-x is read, write and execute permissions. They are broken down into 3 block groups (i.e. in this example foo can be read, written to and executed by user and group and can be read and executed by all)... The 1st bit will have a d if it's a directory etc.
Hope that helps a bit
(If ya wanna know any more let me know)