This is the thing in Wordpress 2.0 that has kept me from upgrading. Why didn't they just leave the upload script alone? It used to be you specified where your upload directory was and were able to set the permissions and be done with it.
In cPanel you need to create email accounts. Once you create those accounts you can use any email program to use them.
There are instructions on the help site that will assist you on setting up your email program.
You can also check out the movie tutorials.
Wlecome to the forums David
Some PHP stuff does not work properly when accessed using IP numbers on a shared server so it would be best to use your domain name.
As for your paths they should begin with "/home/your-cPanel-name/public_html"