Image uploading with HTML Editor

I was hoping you could please help me with the new HTML editor
I have been frustrated with this for 2 days now - it has not been a simply upgrade to my existing iRite pages
I have build a CMS backend system located at iS_admin
As I have a site defined specifically for my Admin section only, but of course it is a sub_folder on the server
I specify my upload folder as /userfiles/
but HTMLEditor upload my images to userfiles/
not userfiles/
If I go insert an image then goto the upload tab - browse for an image then send it to the server.. that will work
although sometimes I will need to click the refresh height and width to see the image
the URL that shows up is /iS_admin/userfiles/nameofimage.jpg
but If I click to insert an image then browse server
I can see the images and I can also upload to the server form there
but when I double click to insert the image the URL returned is /userfiles/nameofimage.jpg
of course it is missing the /iS_admin/ and if I append that to the URL it works.

If in the initial set up of HTML editor I choose /iS_admin/userfiles/ as the upload path I get an error that mkdir can find or create that folder or something like that.

I have also found that if I goto the HTML Editor Site Settings and redefine anything, I need to re-upload the entire HTMLEditor folder as I dont know which files have been modified - it seems there is the config.php but it seems to be defined in other files as well - as there is no documentation I do not know what to re-upload...