Hi there,
Thank you for making my suggestion into a hack. You did a great job. The hack works perfectly.
I source code hacked the .php file and uploaded it, chmod 777 the smilies directory and uploaded the smilies that I wanted to add. (200+ smilies) and went to the back-end, 'add' smilies > multiple, set it to do 100 at once, and clicked master checkbox to select them all. Pressed submit, and repeated this untill all 200+ smilies were processed. I was done within 5 minutes (including installing the hack).
It is a great addition, and for some reason I hope this will be default feature for all upload options, like smilies and avatars, in upcomming version of vbulletin!
[update]
I installed the hack on 5 vbulletin boards, 2.2.7 / 2.2.8 / 2.2.9 versions, hacked and unhacked, and all worked 100% - Thank you