In Professional DotNetNuke 4 by Shaun Walker et al, the chapter on Installing DotNetNuke recommends that the minimum folder permissions for the anonymous web site user account include read and write access to the root installation folder and all child folders.
I experimented a bit and I found that I did not have to give write permissions. So far I have not found any loss of functionality in DotNetNuke as a result of limiting the folder permissions to read only.
I gave write and modify access to the /DesktopModules and /Portals folders, as recommended.
I have also been able to create child portal without giving the Modify access right to all child folders under the root.