Please, review the following help article which provides guidance how to set the
ImagesPaths property of RadEditor for MOSS: Setting
Properties Via Config File
To enable the upload in the Image
Manager you should set also the UploadImagesPaths property as it is shown
Please, note that the current version of the MOSS RadEditor only supports accessing libraries from the current site and parent site. This means that child sites will not be available in the Image Manager.
the Telerik team