I see you cross posted on this item.
The ubb control panel does not create a directory.
The first thing you need to do is create the directory with say a ftp program or your host control panel.
The ubb control panel does not create a directory.
Set the directory permission to 755.
Then got to your ubb control panel and set both path and URL. You can look at the ubb cp Control Panel » DB, Paths & URLs tab-Paths and urls section to get a clue.
Modify the path and url from what you checked above to point to the directory you created.
Select the test link. This will create a test file in the directory if successful.
The same method is used for the upload directory.
On my site I used.
mysite.com/forumuploads/attachments
mysite.com/forumuploads/avatars
This way I know all files in that location came from users.