My b2evolution Version: Not Entered

Can somebody please tell me what i am doing wrong in install that gives me this (above) error message when I try to upload images or files to a post? (searched support forum, no info found.)

I have tried messing with the chmod instructions on the forum to get it to work, and it only ends up getting me into big trouble that I then have to resolve by setting the whole blog directory to chmod 777 just to get back to install.php, and then running an upgrade install over the top of everything, just to get back to square one (along with the original inability to upload files via edit).

Any tips about what environment settings have to occur to avoid this in the first place?

(History: I upgraded to 1.9.2 from 1.8 and from 0.9 after fantastico left me with a version that wouldn't allow me to kill comments -spam was getting to me).