[Steven Zahm]

@ Kathy

It is a file/folder permissions issue. WordPress does not have the necessary permissions to create the folder.

Log in to you site with FTP and navigate to the ../wp-content/uploads/ folder. Make sure the permissions are set correctly. I think they need to be 755. When you change the permissions, make to to propagate the changes to the children folder. Filezilla has an option to do that when you change permissions on a folder.

Hope this helps!