Hi Ryan,
Appreciate the compliment!
The dotnetnuke.config xml file is hydrated into two SkinDefaults objects (Components/Skins/SkinDefaults.vb). Both are stored as public properties of the Globals module (DefaultSkin and DefaultContainer).
Looking at Globals.DefaultSkin, it appears that this object is referenced exactly twice in the DNN core, both in PortalSettings (Components/Portal/PortalSettings.vb, on or about line 733 and 735). I see no references in the DNN presentation layer.
Both references are essentially the same, using AdminDefaultName and DefaultName respectively. The latter reads:
Me.ActiveTab.SkinSrc = "[G]" & SkinInfo.RootSkin & DefaultSkin.Folder & DefaultSkin.DefaultName
SkinInfo.RootSkin is defined in Components/Skin/SkinInfo.vb, and is hardcoded to return the value "Skins". Since the SkinSrc above contains a "[G]" prefix, it is hardcoded as a global skin and will therefore use the global skin directory.
So, the bottom line is that the default skin must be located in the "/Portals/_default/Skins" directory. Whatever is specified in the folder attribute of dotnetnuke.config will be appended to this value.
I haven't fooled around with FrontPage extensions in some time, but although your FTP utility might be hiding these directories, I would not expect this to effect how .NET treats the directory (I suppose you could check the permissions to verify).
Have you started a thread that relates specifically to the issue you're experiencing?
Brandon