Windows XPsp2, iFolder 2.1.3, NW6.5 sp2, IE Ver.6 sp2

iFolder client works fine, I can create, delete. When using iFolder on web
interface selecting iFolder trying to create a directory I get the
following "HTTP/1.1 501 Method Not Implemented" using ifolder in both Text
view and Folder View, I cannot see any of the files I have uploaded
previously through my client either, Net storage works fine. And yes I
have rights. Could not find any Tids or previous discussions regarding
this error.
BTW, this happens only when trying iFolder from NetStorage

Thank you