Links for Images Not Correct

I’m running a test implementation of WordPress to see if I want to move over from TypePad to WordPress (So far I do!). But I’m havinig a problem dragging images from the Browse window to my post. The link to the image isn’t working properly. The way I have WordPress set up is:

http://www.domainname.com/wordpress

As soon as I drop the image from the browse window to the post window I get a broken link.

Looking at the HTML for the image I see:
src=”http://www.domainname.com/wp-content/uploads/2006/10/twainhartelake.thumbnail.jpg” id=”image213″ />

But the link to the image should be:

src=”http://www.domainname.com/wordpress/wp-content/uploads/2006/10/twainhartelake.thumbnail.jpg” id=”image213″ />

Short of manually editing each of these links. (tedious)How do I fix this? Seems as if WordPress isn’t aware of where it’s working from or that I’ve got some piece of configuration that’s not working properly.

Thanks!