the Repository module will attempt to create a folder in the current portal's folder named 'Repository'. This is where uploaded files will be stored.  The default folder for your first (parent) portal is in a  Portals/0  folder, so the Repository module will attempt to create a  Portals/0/Repository  folder. So, I would suggest giving either the ASPNET user or NETWORK SERVICE user account full rights to the  Portals  folder if you are going to have more than one portal, or if you are just going to have one portal, then give full rights to the  Portals/0  folder.

If we're just talking about the Repository module, then that is correct, the only folder the Repository module will write to ( by default ) is the /Portals/# folder ( where # is the portal number )

To complicate matters a little :) , you can change the location of the Repository folder if you are logged in using the host account. On the Repository module settings page you can specify the storage location ( just in case, for some reason, you wanted your Repository files stored elsewhere ). But, if you haven't changed the file location, then just make sure that the web user account ( either ASPNET or NETWORK SERVICE ) has full access to the /Portals/# folder