Problems with Image properties, browse server and Insert Ima

I have seen many posts on similar issues, some "hack" answers, but no real clear way to fix and setup properly.
1- here are the symptoms: In a post, click on insert image, browse server, and no file or folder appears, i cannot navigate to my folders and files
2- With one of the "fix" I found : http://docs.fckeditor.net/FCKeditor_2.x ... d_Uploader
I can browse, but when i select an image file, the URL returned is wrong:
http://www.homedirectory.com/wp-content ... 00x132.jpg
when the directory I am browsing is:
http://www.homedirectory.com/wp-content ... 00x132.jpg

Is there a clean fix or setting in the config.php that will work properly?

Thanks