Hi Chaplain,
What you set for the image store folder? please refer to http://www.cutesoft.net/developer+guide/scr/Specifying-images-path.htm to set it.
The uploader temp problem please change the permission of folder "C:\Windows\Temp". it is the default upload temp folder of the upload function.
Is your site online now? If so, can you post the editor page url? So we can check the image display problem.
Regards,
Ken