Try making their home /var/www and making them the owner of all the files. Then give everyone read access since they can read it anyway and Apache only needs to read them. Or you could do it how I did my server. There's an option in Apache to set a certain directory in everyone's home directory to be their web home. For instance, on my server, I set that directory to be web. So when you go to http://126.96.36.199/~kenshi/index.html, you're seeing what's at /home/kenshi/web/index.html. I doubt you want to do it like that, but if you do, let me know and I'll find out what the option for that is.