I am using DNN version 06.01.05 (142) on Windows Server 2008 R2 and I cannot create a folder via the Image Editor or Upload an Image or File.  It shows the folder structure / images of the existing DNN folders that it knows of, but won't allow me to create new folders or add images.

The app identity if a local account of 0864-WEB02\DNN_Service and it has full control to the entire folder root of the DNN installation. 

If I try to upload an image, I don't get any error, but it doesn't upload the file.  If I try to create a folder (all via the Image Editor), I get an error of "Unable to complete operation.  An unknown error occurred.".

Am  I missing something?  I have full control over the environment as it's my own server (Windows Server 2008 R2).

Thanks.

Check the html editor manager settings (host > html editor manager). There is a setting called Image Manager Settings. By default it is set to the portal root folder, but I typically create a folder in the file manager called "images" if one doesn't exist and point the setting in the html editor manager to that folder.