Please configure img_insert

I am a total newbie working on my first Drupal site. I've searched for the text of themessage, but found no answer to my question.

When I'm putting in content, I have a window below the input format window that contains a compressed version of the page with a notation that says "Please configure img_insert."

The Image Insert module appears to simply need a path to a folder, which I have given it (it's currently an empty folder).

What am I missing?