SharePoint 2010 Custom Permission Levels
The standard SharePoint permission levels (Full Control, Design, Contribute, Read, … etc) are very convenient and may be more than enough in many cases. However, in certain cases, you may need a slightly different permission level. One thing you should NOT do is to edit existing levels. The recommended approach is to copy an existing permission level and modify the copy and SharePoint makes it easy to do so.
To copy a permission level, you need to have access to the parent site in a site collection and have site admin privilege. From Site Actions (top site in site collection), site permissions, click the Permission Levels link under the Edit tab. Select the level closest to your needs and scroll down to the bottom and click the Copy Permission Level button. You will be prompted to provide a new name and description for the new permission level and can check /clear any number of individual permissions that form the full level. For example, you may want a watered down contribute level and want to clear some of all of the Personal Permissions section check boxes. It is a good practice to name it something indicative (ex. LimitedContribute) and include the change in the description. Your new permission level is now part of the official list and can be assigned to users or groups as usual.