Tim, I'm not sure that I can help much, but you might want to check and make sure that all your write permissions are set right for the upload directory. I'm not sure exactly how you would do that for IIS... If I have time, I will setup a test board on my IIS machine and see if I can get it to work. If so, I will let you know what I find out.
Everyone else, if you are interested in displaying both the URL code and the IMG coding after your user uploads check out this
FILE . It's pretty simple and I made it as cut and dry as possible. Enjoy
Tom