FlashVideo module keeps insisting on uploading files to files (filesystem root) directory regardless of Import Directory setting

FlashVideo module keeps insisting on uploading files to /files (for my conf it's sites/default/files), even though I specified the Video Import Directory as "video", Original Directory as "media" and Output Directory as flash, all directory exist and are writable by everybody.

From what I understand, this setting should make FlashVideo upload the original files by default to sites/default/files/video, but it keeps putting them to just sites/default/files, and happily reports so when I click the Attach button on top of the page... am I missing something here ?

please, help...

-- mitek