I don't understand this command

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http://forums.fedoraforum.org – I am reading a textbook about how to use linux and I am in the chapter that introduces shell scripting. Here is the link if you would like to see the book/chapter that I am referring to (http://rute.2038bug.com/node10.html.gz). Anyways, the book told me to create a file with the name <filename>.sh which I did. Next it asked me to use the command chmod 0755 myfile.sh. I have googled chmod and I have searched around and I don't understand what this command does. It is my understanding that Chmod changes permissions? Is that right? What will this command do? Thanks! (HowTos)