I had the problem with users not being able to modify their own records ... when they do a search for records to modify it says no records found even if you use a wildcard character. I changes the line to:
# Registered users: can modify/delete _only_ own records. For this to make
# sense you should set default off or to 1,0,0,0.
$auth_modify_own = 0;

per your instruction, but now everyone can modify everyone else's record.

Any ideas?

Oops, I didn't realise you wanted users to be able to only modify their own records. Ok, switch it back to $auth_modify_own = 1.

Then log in as a user (not admin), create a record, then try modify. Can you not modify that record you just made? If not, send me the URL and turn $db_debug on.

Cheers,

Alex