For me, the problem is using GoDaddy’s Windows server. Only they can set permissions on the root, and they don’t set it up to allow WordPress to create new directories when you upload media via WP.
I finally caved and purchased their Linux hosting plan, and everything works fine. Since I still have a year to go on my Windows hosting plan I asked if they’d credit that over to my Linux hosting plan and they refused. The rep talked to his supervisor, but said I needed to have a specific problem. I guess not setting things up right on THEIR end so WP could work right wasn’t “specific” enough!
Very unhappy with GoDaddy. Next time will use Bluehost for any Word Press sites.