I've had this membership issue with every version of Dolphin, starting with 7.01 and currently also on my 7.06 upgraded Dolphin. There are currently 3 membership levels ... All of them are free.
The moderator is for site admins with almost unlimited access. Pretty sure those are fine too. Nobody can be a moderator unless that membership is actually assigned to them by myself, the admin account holder.
The promotional membership appears to work properly as well, but not without problems because when I try to change a promotional membership to a standard membership while logged in as admin, that step won't work for whatever reason. The SET TYPE button is there but when I click on it I can't enable the checkbox or select the unlimited duration field. Assigning memberships via admin used to work, don't know exactly when that stopped.
Even worse, the standard memberships that do exist ... DO NOT WORK according to the privileges that have been assigned to them. First and foremost the purpose of the standard membership is supposed to be of permanent duration. That appears to (still) work. But when a member with a standard account tries to add videos or sounds or photos to one of their existing albums, up comes ... ACCESS DENIED:
I have checked the permissions, settings, and every thing else that I could think of repeatedly during the past several months, after every upgrade, and still this problem persists.
Is it perhaps NOT POSSIBLE to have a FREE permanent account for people who join?
This is driving me nuts, what is causing those access denied messages?
Again, the promotional accounts do not have this problem ... Any ideas or fixes ... anyone else ???

