okay setting 777 chmod....i can't do it through IE6 so i downloaded Filezilla from sourceforge (search for Filezilla lol) and installed that...makes ftp'ing much easier too

anyway....connect and then find the file on the right....right click and go to properties i believe it is....you will see check boxes and 666 or 755 or 777 or something similar...in the numbers just put 777 and okay.
pretty sure your error might deal with your image folder not being chmodded...but i am no expert on errors sorry.