AFAIK, yes it's manual.
The best practice is to set the most basic level of permissions on the "Home" folder, then start applying more specific permissions on folders at that level (and similarly for sub-levels)
And this is just one problem. What happens if I'm asked to remove a specific user from a folder and all it's subfolders? Do I have to go through each object in each subfolder manually?
Yes, you would have to go to each sub-folder and specify "Revert to parent Security", or in the case of removing users, you would need to choose "Edit Item Security" (which will permanently revoke the security that was inherited from its parent), then remove the user.
It bites. I wish I had better news....perhaps someone out here has a better options for you
______________________________________________________________________________"Never argue with an idiot; They'll drag you down to their level and beat you with experience"