That, for me, is a bug in that version of SMF. "Standard" always shows checked, there, even if it isn't the way it's set. Until you hit "Change file permissions", you can't be sure. (Silly, huh?)
As for the error you're getting, have you one as suggested and checked the server error logs?
You can see them by going to your site's CPanel (If you have that) and looking at (Believe it or not) "Logs" section, where you'll see "Error log"..