"insert/edit image" button does not respond

I have setup PowerCMS to the point where I can edit text content successfully. However, I cannot see any images, and the clicking "insert/edit image" button in the editor does not give any response (it is not grayed out). Same goes for flash, and even the smiley. What am I missing? Here are my global settings:

$WAGLOBAL_Root_URL = "http://www.thedomain.com/CMS100/" ; //Absolute path to your site folder.
$WAGLOBAL_Site_Name = "Domain Admin" ;

$WAGLOBAL_localRoot = "/CMS100/"; //relative path to your PowerCMS files on your local testing server.
$WAGLOBAL_remoteRoot = "/CMS100/"; //relative path to your PowerCMS files on your remote server.

//iRite Images upload settings
$WAGLOBAL_Images_Folder = "images/"; //relative path to your images folder.
$WAGLOBAL_Swf_Folder = "swf/"; //relative path to your swf folder.
//$WAGLOBAL_Files_Folder = "../"; //relative path to your files folder.
//$WAGLOBAL_Media_Folder = "media/"; //relative path to your media folder.

// Admin Settings
$WAGLOBAL_Admin_UserName = "myuser" ;
$WAGLOBAL_Admin_Password = "mypassword" ;

Thanks,
Robert