Forward slashes should be fine; at least, I know they are for Apache, but IIS is a different animal.
Anyhow, make sure /plogger and /plogger/images have the right permissions for Plogger to write to them, otherwise this would be expected. Try to CHMOD the folders to make them writable. Sorry if that seems obvious, but it's a good place to start.
Also, when you install Plogger, take off the trailing slash. Tell it your installation is at "www.myserver.com/plogger" instead of "www.myserver.com/plogger/", so that you lose that extra slash above, because that is another thing you seem to have in common.
m19gibbs52: You're getting an error on C: in Linux? Has the world gone mad? Also, safe mode shouldn't be the problem; it's obviously trying to create the directory, so the PHP looks to be working alright.
Did I actually write, "safe mode shouldn't be the problem"? I'm an idiot. ;)
As for where to specify it, Plogger itself determines where it's installed. I don't have Beta 2 to check, but look for $_SERVER variables; I believe that's where we get it from.
Jesse, make sure safe_mode is off, and that you chmod any directories to be written with 777.
I also have this problem(Could not create directory!) in the beta2 it is not seem the permision problem please help me! (Redhat Linux ES/ Php v4.3.9/Apache)