asp.net 2.0

When I first set up the app I'm working on, it was not in teh inetpub
folder. Instead, VWD put it in the VS folder in My Documents. I was brand
new to all this when I started working on this project. At the time, I
created a page that allowed for uploading images. It's simple enough and was
working fine. Later on after some more reading, I discovered that I should
have my project in the inetpub folder to see it in IIS. So I did that and
most everything is fine. But now my file upload doesn't work. This is all on
my development machine so far (win2k pro sp4 so it's IIS 5). I checked the
permissions through IIS of the folder that I'm trying to upload to. It was
set as read only so I changed it so that the "write" box is now checked as
well. That didn't help. I still get a folder access denied error duiring the
upload attempt. What should I do to handle this? Everything I find online
deals with people who say "... it was working fine on my development machine
but when I put it up on a server for the web it stopped working..." That's
not my situation right now (although in a couple of weeks it might be mine
as well).

Second question is that it seems like it would be unsafe to open up a folder
to write access without soem other precautions. The folder is goign to store
images of people. I'm thiking that the safest thing to do would be to have a
temp folder that has write access so that the pictures can be uploaded there
and then I'd have to do something else programatically to move them to the
live read only for viewing pictures folder. I guess I'm looking for some
advice here on what's the most practical and safest way to handle this sort
of thing.

Thanks,

Keith