Problems with latest avatar plugin.

Im having some problems with avatars-2.0.2

im getting alot of errors such this:

Warning: mkdir() [function.mkdir]: Permission denied in /home/web27648/domains/xxxx/public_html/wp-content/mu-plugins/avatars.php on line 341

Warning: move_uploaded_file(/home/web27648/domains/xxxx/public_html/wp-content/avatars/user/c4c/jag.JPG) [function.move-uploaded-file]: failed to open stream: No such file or directory in /home/web27648/domains/xxxx/public_html/wp-content/mu-plugins/avatars.php on line 346

Warning: move_uploaded_file() [function.move-uploaded-file]: Unable to move '/var/tmp/phpSX2Sxk' to '/home/web27648/domains/xxxx/public_html/wp-content/avatars/user/c4c/jag.JPG' in /home/web27648/domains/xxxx/public_html/wp-content/mu-plugins/avatars.php on line 346
There was an error uploading the file, please try again!
Warning: getimagesize(/home/web27648/domains/xxxx/public_html/wp-content/avatars/user/c4c/jag.JPG) [function.getimagesize]: failed to open stream: No such file or directory in /home/web27648/domains/xxxx/public_html/wp-content/mu-plugins/avatars.php on line 353

Same kind of errors when ading blog_avatar.

please point me in the right direction, is it a chmod problem?