when I open the batch upload window, I see the "select directory" heading, then there's just text "This function allows you to add a batch of file that your have uploaded to your server by FTP. Select the directory where you have uploaded your files" There is no directory tree image as per the instructions. I wonder if this is something that works only on PCs? I'm using OSX and tried with Explorer 5 and Safari 1.3 browsers with the same results. I successfully uploaded using the upload file option.
Did you create a subdirectory in the /albums directory, set the permissions properly, and FTP images into it?