Yes, the PhotoPlog images directory needs to be set to 777 permissions in a web accessible location. However, remember that having a 777 directory in and of itself is not the security issue. The security issue arises for two main reasons: 1) you are on shared hosting and your host doesn't block other people on that server from accessing your account and 2) the script has a vulnerability. To date, as far as I am aware, PhotoPlog has not had a vulnerability.
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Please use the forums for support, feature requests, and similar such things. Support does not include custom code, custom template edits, or third-party modifications. PMs and emails to me should be for private information only, such as login information. If you PM or email me a support question, chances are good that I'll ignore it.  Thanks. 
While the work or play is on, it is a lot of fun if while you are doing one you don't constantly feel that you ought to be doing the other. -- Franklin Pierce Adams
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