folder action

Hi all
I found this script on the web and essentially it does what i need it to do but it would be a lot easier if i could convert it to a folder action script. Is there a way of doing that to this script?

on open(A) 
repeat with B in A 
set mypath to quoted form of POSIX path of B 
if mypath is "'/'" then 
error "Changing the permissions of everything on your hard disk will damage your setup. The permissions will not be changed." 
else 
do shell script "chmod -R 777 " & mypath 
end if 
end repeat 
end open

This should work anyway you run it: from the Script Editor, when saved as a script and run from the Script Menu, when saved as an application and run or when items are dropped on it, or as a Folder Action:

on open these_items 
     repeat with this_item in these_items 
          set this_item to this_item as Unicode text 
          my process_item(this_item) 
          if this_item ends with ":" then my process_folder(this_item) 
     end repeat 
end open 

on run 
     open {choose folder with prompt "Select a folder whose permissions need modification:"} 
end run 

on adding folder items to this_folder after receiving these_items 
     open these_items 
end adding folder items to 

on process_folder(this_item) 
     tell application "System Events" 
          try 
               set these_items to files of folder this_item whose visible = true --comment out the whose clause to process invisibles too 
          on error 
               set these_items to {} 
          end try 
          try 
               set these_items to these_items & folders of folder this_item 
          end try 
     end tell 
     open these_items 
end process_folder 

on process_item(this_item) 
     do shell script "chmod -R 777 " & (quoted form of POSIX path of this_item) 
end process_item

Jon