Looks good :D

Perhaps look into the PDO class as a database handler rather than using mysql* functions. Its compiled in C++ and uses the MySQL API directly (as well as supporting many other database drivers) so its alot faster than the standard mysql* functions.

Also its OO and alot more secure against SQL Injection as it uses prepared statements and binds.

http://net.tutsplus.com/tutorials/php/why-you-should-be-using-phps-pdo-for-database-access/

FYI. Should always chmod to 755 rather than 777, otherwise every user on the system will be able to write to the files, where as with 755 only the http daemon user can ;)