CHMOD file permissions break down like this:
First digit - owner
Second digit - group
Third digit - everybody
The numbers go like this:
1 - execute
2 - write
4 - read
Add those together to get your full listing:
0 - nothing
1 - execute
2 - write
3 - execute, write
4 - read
5 - execute, read
6 - write, read
7 - execute, write, read
(It actually does this by using three bits of binary for each. That's why it's in powers of two, and you end up with 2^3 posssible combinations in the end: 8.)