Hi Alan,
There was some weirdness over setting the permissions, which I think I've now fixed, can you confirm that it's doing what you want now. If not you could send me some more details and a URL to admin@e-voice.org.uk and I'll investigate further.
The idea of a 'dropbox' folder should work fine, and should be a convenient way to allow your members to send files to you.
You should be able to remove 'read' permission for everyone other than members, once you've clicked the button to stop it inheriting permissions.
Note that I didn't spot "Euphonix (Admin)" in the permissions list. Maybe this is a group that you had added to the site but have subsequently removed?
Thanks
Joe