Exchange 2007 Public Folder Permissions

To grant a group permissions on an Exchange 2007 public folder the group MUST be mail enabled. To do this you must first create a Universal Security group and then mail-enable the group via Exchange Management console/shell. Once these two steps are complete you will be able to assign permissions via Outlook or Exchange management shell.

As a final step I recommend hiding the group from the GAL via Exchange Management Console > Recipient Configuration > Distribution Groups > GroupName properties and finally Advanced tab.