I donot know much about CIFS but i have been asked to look into an issue related to mounting CIFS filesystem

On my redhat 5.6 the /etc/fstab file has the following entry

But when the directory is listed it appears as
Secondly when i su as de0adm and cd to /dir1/de0 it does not allow me to create a file in this directory. It complains with "permission denied"

Any suggestions will be appreciated

I don't see anything wrong with that; what were you expecting it to show?

Of course it does, the directory doesn't have write permissions.

Try adding "noperm" to the mount options or use ACLs (cifsacl).

You might as well verify the permissions in the source server (172.25.x.x).

From man mount.cifs:

       dir_mode=arg
           If the server does not support the CIFS Unix extensions this
           overrides the default mode for directories.