Setting item permissions for new items

A common question that I recently answered in a sharepoint conference is how to make a sharepoint list only show items to the users who wrote the items, and users specified in the item's properties.
A good example of this is a task list where only the original creator of the task and the assignee can see and change the task. This is impossible to do in sharepoint out of the box, and that is where we, as developers, come in.
The way to do it is by developing a simple event handler and attaching it to the list. I prefer to attach to ItemAdded and ItemUpdated - put the exact same code in both events (so that people can reassign the task). The code sample below is a good starting point for you to figure out how to do this. The code sample assumes you know how to use visual studio to create a new event handler, and is meant only as a sample - it doesn't have error handling and it does have some hard coded values for a task list that you may want to change.

public override void ItemAdded(SPItemEventProperties properties)
        {
            //get the list item that was created
            SPListItem item = properties.ListItem;
            //get the author user who created the task
            SPFieldUserValue valAuthor = new SPFieldUserValue(properties.Web, item["Created By"].ToString());
            //get the "assigned to" user. Note - this will throw an error if the task is not assigned to anyone - implement error handling!
            SPFieldUserValue valAssignedTo = new SPFieldUserValue(properties.Web, item["Assigned To"].ToString());
            //disconnect the security from the list, and delete all permissions
            item.BreakRoleInheritance(false);
            //create the object that will hold the roles for the author user
            SPRoleAssignment authorRole = new SPRoleAssignment(valAuthor.User);
            //create the object that will hold the roles for the assigned to user
            SPRoleAssignment assignedToRoles = new SPRoleAssignment(valAssignedTo.User);

            //get the contribute role from the web. Alternatively use code to create a new role definition with custom permissions.
            SPWeb oWebsite = properties.Web;
            SPRoleDefinitionCollection collRoles = oWebsite.RoleDefinitions;
            SPRoleDefinition oRoleDefinition = collRoles["Contribute"];

            //assign permissions to task author
            authorRole.RoleDefinitionBindings.Add(oRoleDefinition);
            item.RoleAssignments.Add(authorRole);
            //assign permissions to task assignee
            assignedToRoles.RoleDefinitionBindings.Add(oRoleDefinition);
            item.RoleAssignments.Add(assignedToRoles);
            //update the item
            item.Update();
            base.ItemAdded(properties);
        }

You can download the entire code sample as a visual studio project from my company's site's code samples document library at http://www.extelligentdesign.com/Code%20Sample%20Downloads/Forms/AllItems.aspx. You will want to change the project's properties to point to your local development site before debugging