I understand that it uploads fine. The problem, is that it isnt prepending a / to the userfiles, as it should.
It would still work on the site, but you wouldnt be able to see it in your admin, because it is one level deeper.
I had noticed in earlier versions (I am using HTMLEditor now, instead of iRite) that it did that sometimes if I used the upload tab, (quick upload) instead of the browse server button.
That is why I asked if you tried both methods.