Thanks for getting back to me on this.
I decided yesterday, for the sake of organization to put the CMS files in their own directory called PowerCMS, so the structure has changed a bit, but no matter what I do, or how I configure my WA_Globals.php file, the images go straight to the root. I then have to change the path in order to insert the image into any page.
My code now reads...
$WAGLOBAL_Root_URL = "http://www.mysite.ca/" ; //Absolute path to your site folder.
$WAGLOBAL_Site_Name = "MySite" ;
$WAGLOBAL_localRoot = ""; //relative path to your PowerCMS files on your local testing server.
$WAGLOBAL_remoteRoot = "/PowerCMS/"; //relative path to your PowerCMS files on your remote server.
//iRite Images upload settings
$WAGLOBAL_Images_Folder = "images/"; //relative path to your images folder.
$WAGLOBAL_Swf_Folder = "swf/"; //relative path to your swf folder.
Any other suggestions? it seems from reading this forum that a few other users have had the same issue as well.