hadoop-1.0.4 seems still have the problem 'java.io.IOException: Failed to set permissions of path:xxxx'. I reproduced this issue in my windows server 2008 enterprise machine. I googled an [url=http://prazjain.wordpress.com/2012/02/01/java-io-ioexception-failed-to-set-permissions-of-path-filetmphadoop-pjainmapredstagingpjain1500477637-staging-to-0700/]article[/url]. After I switched to the version 0.20.2, everything goes well.