Straight to the points:
- In RadEditor for MOSS you need to set only the ImagesPaths - under MOSS there are no UploadImagesPaths and DeleteImagesPaths because, this depends on the libraries permissions.
- The path must not include "~" because, under moss we are pointing libraries.
- In the latest version of RadEditor for MOSS you can set the paths to point to the root site in the site collection ("/Images") or to the current site ("Images"). This depends on the "/" before the folder - these are the only two opportunities.
In addition to this please, review the following help article: Set Properties Via Config File
I hope this helps.
the Telerik team