Hi, What are the main guidelines to setting up a user account on a Linux machine for a web app?

In my case it is a Rails application that does file management.

First thing I can think of is to limit access rights to only the directories it needs. But how exactly should I go about this? Setup rights through a user group or a through the user's ownership of those directories. I have very little experience in user rights management.

What else do I need to consider? I've heard of ACL's and SELinux, do I need to look into any of these to guaranty decent security for my simple web app?

Any advice about this and anything not mentioned welcomed, Thanks, Max.

I will be using Ubuntu.