When you say you choose the default do you mean that you did not enable advanced file management or the default skin? When you configured the upload folder what did you select?
I have seen the error creating folder message before, but it usually has a valid folder path and name in the error. If you can please post back with a copy of the page in question as well as a copy of your HTMLEditor folder in a zip archive. I will take a look and the files and test some things to determine what may be occurring for you.