Can't set upload directory in site settings

I would like to have all uploads saved in my "UPLOADS" folder in the root directory. From the site settings, the used the browse button to navigate to my uploads folder then I choose SELECT. However the uploads folder is not displayed in the "upload directory" field. It just shows "/" and all files are uploaded to my root directory. When I manually enter the uploads folder (i.e. /uploads/) in the upload directory field, I still have the same result. I have set-up write permissions on my uploads folder and subfolders.

Try creating a new folder inside the uploads directory, and selecting that one.

There is a bug in Dreamweaver on Windows Vista SP2 and Windows 7 where the folder selection returned is one level below the actual selected folder.