You have to make your uploads directory writable so WordPress can save your images to it. Don't take as gospel the URL that it provides, either.
In my case, I have my images that I upload in connection with day to day blogging (which is usually the kind of images I'll upload via the WP control panel) in a directory called /images. It is NOT a subdirectory within WordPress, although you could put the folder pretty much anywhere and call it whatever you like.
So for argument's sake, let's say you appease WP and create a folder called "uploads" INSIDE the folder wp-content. So in your case, the folder resides at
Be sure that in your WP Options | File Upload Options, you specify this folder path (no trailing slash) in the box called "fileupload_realpath" and that you specify the URL (I'm going to guess http://www.yourdomain.com/journal/wp-content/uploads) in the box called "fileupload_url".
THEN be sure you enable file uploads by making sure "yes" is displayed in the dropdown box under "use_fileupload".
FINALLY, in your FTP program, CHMOD the directory /uploads to 766. That should do it!