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BroKen,
Check your PHP Info page to see if you have Safe Mode turned on or off on your server. If your server has Safe Mode turned on then you will be unable to create new folders dynamically like that from a script.
But, don't worry... if you come back and say you have Safe Mode turned on there is still a solution for you. I just don't want to tell you to use that solution yet unless you positively have to.
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