You have a link to phpinfo?
Link to site?
Well I have tested creating a cat it works as expected and no one has reported any issues like this.
Basically the things to check are this
1. Ensure the data directory server path and url's are both absolutely correct in the Admin => Global Options
2. Ensure that the data directory is absolutely 777
3. Safe Mode must be off
There if the above is correct then when you create a category you should have a numeric category with thumbs and large directories created all with index.htm files contained. Here is the line in adm-misc.php
Code:
Content visible to verified customers only.
mkppdir is the same function we use in photopost except medium is large in classifieds. It calls a function which makes the directories like so as this is right from the pp-inc.php
Code:
Content visible to verified customers only.
Does your server error log have any errors contained within it? Make sure your using the full server path as defined in PHPINFO to your data directory. I know sometimes people drop like the /home or so off the front of the path
You can as always PM me info to check this out