Windows Server 2003 folder permissions propogation

I have a huge tree of folders containing PDF data for certain branches
we have. A rudimentary diagram would look like this:

BRANCH
--BRANCH1
----PAYROLL
----SALES
--BRANCH2
----PAYROLL
----SALES
-
-
-
I have over 175 branch folders, and each branch folder contains a
minimum of two sub-folders inside it.

When I originally set up this structure I set up myself (Admin rights)
with full access and gave the Everyone group "List Folder Contents"
rights. These rights were propagated down through the folder
structure and I then had a temp go into each branches folder and
manually assign the users in that branch the appropriate rights,
propagating them down within the local branches sub-folders.

My problem is that one of my co-workers recently went into the root
BRANCH folder, gave the Everyone group Full Access and used the
"Replace permission entries on all child objects..." within the
Advanced tab, and ended up giving all users full access to each others
folders!!

I need to quickly change the Everyone group rights back to "List
Folder Contents" on all folders and also add in our CFO, giving him
full rights to all folders...but not change any of the existing rights
in the sub-folders.

I can see the two check boxes for "Inherit from parent the
permission..." and "Replace permission entries..." under the Advanced
tab in Security...but I'm not 100% sure what effect they have. I
don't want to make things worse.

Suggestions??