Hi,
Unless I'm misunderstanding, it seems to work for me.
The Archive Folder menu, in addition to displaying already existing folders, should also allow a new foldername to be typed in. The images will be uploaded into that folder, and the folder will be created if it didn't already exist.
If your Archive Folder menu is not allowing you to type in a new foldername, there is definitely something wrong.
Hope this helps,
Bill