i place stones, can check the perimeters with visualize, all the stats display when i right click stones. but they don't actually do anything. friends can break squares inside city protection, mobs spawn inside mob spawners, etc. nothing works.

This is not a bug, it works fine for everyone else. Its something with your setup, most likely permissions.

gotcha, i'm not really quite sure how to set up permissions. is there any documentation that i can read up on that will clear that up for me?

http://wiki.sacredlabyrinth.net/index.php/PreciousStones