avatar plugin

i put avatar.php in mu-plugins, avatars.php &defaults avatars in wp-content

tried uploading an image and got this error
Warning: mkdir() [function.mkdir]: Permission denied in /home/*****/wp-content/mu-plugins/avatar.php on line 232

Warning: move_uploaded_file(/home/*****/wp-content/blogs.dir/1/avatar/default_avatar_96.png) [function.move-uploaded-file]: failed to open stream: No such file or directory in /home/*****/wp-content/mu-plugins/avatar.php on line 237

Warning: move_uploaded_file() [function.move-uploaded-file]: Unable to move '/tmp/phpKrnkW7' to '/home/*****/wp-content/blogs.dir/1/avatar/default_avatar_96.png' in /home/*****/wp-content/mu-plugins/avatar.php on line 237
There was an error uploading the file, please try again!

am i supposed to change permissions on any files?