You want to set file permissions to provide the maximum level of security.
The bin directory under the ServerRoot should be owned by user root, group root, and have file permissions of 755 (rwxr-xr-x). Files contained therein should also be owned by root.root and be mode 755.
Document directories, such as htdocs, cgi-bin, and icons, will have to have permissions set in a way that makes the most sense for the development model of your particular web site, but under no circumstances should any of these directories or files contained in them be writable by the web server user.
The conf directory should be readable and writable only by root, as should all the files contained therein.
The include and libexec directories should be readable by everyone, writable by no one.
The logs directory should be owned and writable by root. You may, if you like, permit other users to read files in this directory, as it is often useful for users to be able to access their logfiles, particularly for troubleshooting purposes.
The man directory should be readable by all users.
Finally, the proxy directory should be owned by and writable by the server user.
You should be aware that if you ask 12 people for the correct ways to set file permissions on your Apache server, you will get a dozen different answers. The recommendations here are intended to be as paranoid as possible. You should feel free to relax these recommendations, based on your particular view of the world and how much you trust your users. However, if you set file permissions any more restrictive than this, your Apache server is likely not to function. There are, of course, exceptions to this, and cases in which you could possibly be more paranoid are pointed out later.
The most important consideration when setting file permissions is the Apache server user the user as which Apache runs. This is configured with the User and Group directives in your httpd.conf file, setting what user and group the Apache processes will run as. This user needs to have read access to nearly everything but should not have write access to anything.
The recommended permissions for the bin directory permit anyone to run programs contained therein. This is necessary in order for users to create password files using the htpasswd and htdigest utilities, run CGI programs using the suexec utility, check the version of Apache using httpd -v, or use any of the other programs in this directory. There is no known security risk of permitting this access. The web server itself cannot be stopped or started by an unprivileged user under normal conditions. These files, or the directory, should never be writable by nonroot users, as this would allow compromised files to be executed with root privileges.
Extra-paranoid server administrators may wish to make the bin directory, and its contents, readable and executable only by root. However, the only real benefit to doing so is that other users cannot run the utilities or httpd server, such as on a different port. Some of those utilities, such as htpasswd and htdigest, are intended to be run by content providers (i.e., users) in addition to the webmaster.
The conf directory, containing the server configuration files, can be locked down as tightly as you like. While it is unlikely that reading the server configuration files will allow a user to gain additional privileges on the server, more information is always useful for someone trying to compromise your server. You may, therefore, wish to make this directory readable only by root. However, most people will consider this just a little too paranoid.
Document directories are particularly problematic when it comes to making permission recommendations, as the recommended setting will vary from one server to another. On a server with only one content provider, these directories should be owned by that user and readable by the Apache user. On a server with more than one content developer, the files should be owned by a group of users who can modify the files but still be readable by the Apache user. The icons directory is a possible exception to this rule, because the contents of that directory are rarely modified and do not need to be writable by any users.
The include and libexec directories contain files that are needed by the Apache executable at runtime and only need to be readable by root, which starts as root, and by no other users. However, since the include directory contains C header files, it may occasionally be useful for users to have access to those files to build applications that need those files.
The logs directory should under no circumstances ever be writable by anyone other than root. If the directory is ever writable by another user, it is possible to gain control of the Apache process at start time and gain root privileges on the server. Whether you permit other users to read files in this directory is up to you and is not required. However, on most servers, it is very useful for users to be able to access the logfiles particularly the error_log file, in order to troubleshoot problems without having to contact the server administrator.
The man directory contains the manpages for the various utilities that come with Apache. These need to be readable by all users. However, it is recommended that you move them to the system man path, or install them there when you install Apache by providing an argument to the mandir argument specifying the location of your system man directory.
Finally, the proxy directory should be owned by, and writable by, the server user. This is the only exception to the cardinal rule that nothing should be writable by this user. The proxy directory contains files created by and managed by mod_proxy, and they need to be writable by the unprivileged Apache processes. If you are not running a proxy server with mod_proxy, you may remove this directory entirely.