I have the same problem and also haven't been able to find a solution. On my install, the joomlawatch logo doesn't show up correctly on the front end either. Not sure if the 2 problems are related? Right clicking the logo placeholder and selecting "properties" yields the following URL for the logo:
The random number changes each time the page is viewed. Entering the logos actual address (www.mywebsite.com/components/com_joomlaw...watch-logo-16x16.gif
) brings it up just fine - so I don't think that part is permissions related. Not sure what's going on - are you having issues with the logo, too?
My site is hosted on hostmonster.com. For me, this is the about the only extension I've tried that hasn't worked right out of the box as I have a fairly typical Joomla! installation. I've tried it with SEO enabled and disabled to no avail.
Anyone else have any ideas?