I have the same issue. I don't understand why it needs an 'uploads' folder anyway? We'd just like the user to browse their machine for images to upload. Also does it insert them inline or just add them as a link?

Surely it should be ImageGalleryPath for the images folder?

EDIT getting really annoyed with FF adding <br> every time you backspace...

EDIT2: Editor1.Setting["security:ImageGalleryPath"] = "~/temp";

This doesn't work either..