I still remember the day when this happened (I was the one who got this call, while working at Sun in their support center back in 1994)... it made it's way into Tech Support Tales, #3, but I thought I'd extract it here, too, so I could link to it -- it seems someone just did something similar recently. oi.
I received a call from a customer who was having some permissions problems... grantpt wasn't working, so he couldn't get shells open, etc., etc... So, I started going through the permissions on his machine... ls -ld / showed 755 -- this was fine. ls -ld /usr showed 777 ... I told him this was probably not directly the problem, but that we should change it anyway... so I asked him to change it to 775 I even told him the command he could use: "chmod 775 /usr" he said okay, so I asked him to cd into /usr, and do an ls -l there, and to tell me what he saw. He said he was still waiting... I asked "for what? the cd? the ls?" -- response: "the chmod". EEK! "what EXACTLY did you type?" "chmod -f -R /u..." I didn't even let him finish before I told him to type control-C I ended up suggesting he re-install from scratch, because he apparently didn't have very much user data, and what little he did have, he had backups of that he could restore from if need be. The original problem in fact had been that he had done a chmod -f -R 777 /usr, which, of course, will completely hose any setuid permissions that might occur there.
Isn't life fun? :-D