Linux – cannot remove owned file with 777 permissions

ls -al
total 12
dr-xr-xr-x 3 rayell pg1083760 4096 2010-10-10 10:00 .
drwxr-xr-x 3 rayell pg1083760 4096 2011-09-02 04:33 ..
-rwxrwxrwx 1 rayell pg1083760    0 2011-09-02 06:38 default.settings.php
drwxrwxrwx 2 rayell pg1083760 4096 2011-09-02 04:33 files
-rwxrwxrwx 1 rayell pg1083760    0 2011-09-02 06:38 settings.php


rm -Rf *
rm: cannot remove `default.settings.php': Permission denied
rm: cannot remove directory `files': Permission denied
rm: cannot remove `settings.php': Permission denied

The reason is that the parent directory has chmod 705 or something like that. You can chmod the parent directory by the following command:
chmod -R 777 directory_name
After this, you can remove that directory and the files it contains.