editor screen funky after upgrade

I upgraded from a 2.0 version and while categories work on the editor page, the editor itself doesn’t and it looks really odd. I know what the screen should look like because I uploaded 2.2, the whole thing from scratch to another site and it looks and works fine. But this thing looks like a mongrel version of like MySpace or something.

I did a screen capture of what it looks like because it’s kind of hard to explain without it. http://swamptropolis.com/swampland/edit_screen.jpg”

It’s got a drop-down “format” menu for one thing with choices like “paragraph” “heading 1” “heading 2” etc. and that little down arrow next to the format menu, when I hover over it, says “select text color” but when I do, the world “false” appears in the space where you write your post.

I tested the thing and all it would publish was the topic, not content. What the heck happened? What did I miss?

One other thing is that when I try and upload a picture on the page it says that it can’t create “uploads” and asked if the parent directory was writable on the server. I did a CHMOD of 755 on the wp-content directory, but there was no change. Do I have to CHMOD 755 on the directory my word press is in?

Thanks for any help