BuddyPress.org

When I try to upload new avatars to a new WPMU+BuddyPress installation the following message is displayed:

Upload Failed! Error was: Unable to create directory /var/www/vhosts/terrywassall.org/httpdocs/blogs/wp-content/blogs.dir/1/files/avatars/3. Is its parent directory writable by the server?

There is a folder called:

blogs.dir 4.00 KB rwx r-x r-x Nov 6, 2009 apache apache

but it is empty and I do not have write access to it of change permissions

Installation versions:

WordPress MU 2.8.5.2.

BuddyPress Version 1.1.2

I would be grateful for any suggestions.