=== modified file 'INSTALL.txt'
--- INSTALL.txt	2007-12-20 08:57:54 +0000
+++ INSTALL.txt	2007-12-21 00:53:35 +0000
@@ -83,16 +83,14 @@ INSTALLATION
 
      chmod o+w sites/default
 
-3. CREATE AND GRANT WRITE PERMISSIONS TO FILES DIRECTORY
+3. GRANT WRITE PERMISSIONS TO FILES DIRECTORY
 
    Drupal requires the files directory be present and writable during
    the installation (the location of the files directory can be changed
-   after Drupal is installed). Use the following commands (from the
-   installation directory) to create this directory and grant the
-   web server write privileges to it:
+   after Drupal is installed). Use the following command (from the
+   installation directory) to grant the web server write privileges to it:
 
-     mkdir files
-     chmod o+w files
+     chmod o+w sites/default/files
 
 4. CREATE THE DRUPAL DATABASE
 
@@ -148,16 +146,11 @@ INSTALLATION
 
      * your site runs multiple Drupal installations from a single codebase
        (modify the file system path of each installation to a different
-       directory so that uploads do not overlap between installations);
+       directory so that uploads do not overlap between installations); or,
 
      * your site runs a number of web server front-ends behind a load
        balancer or reverse proxy (modify the file system path on each
-       server to point to a shared file repository); or,
-
-     * your site policies specify that all site-related files are stored
-       under the sites directory in order to simplify backup and restore
-       operations (modify the file system path to point to a newly-created
-       directory underneath sites).
+       server to point to a shared file repository).
 
    To modify the file system path:
 

=== modified file 'includes/file.inc'
--- includes/file.inc	2007-12-19 21:40:04 +0000
+++ includes/file.inc	2007-12-21 00:53:35 +0000
@@ -959,7 +959,7 @@ function file_directory_temp() {
  * @return A string containing the path to Drupal's 'files' directory.
  */
 function file_directory_path() {
-  return variable_get('file_directory_path', 'files');
+  return variable_get('file_directory_path', 'sites/default/files');
 }
 
 /**

=== modified file 'modules/system/system.install'
--- modules/system/system.install	2007-12-20 08:57:54 +0000
+++ modules/system/system.install	2007-12-21 00:55:16 +0000
@@ -151,6 +151,12 @@ function system_requirements($phase) {
 
   // Test files directory
   $directory = file_directory_path();
+
+  // For installer, create the directory if possible.
+  if ($phase == 'install' && !is_dir($directory) && @mkdir($directory)) {
+    @chmod($directory, 0775); // Necessary for non-webserver users.
+  }
+
   $is_writable = is_writable($directory);
   $is_directory = is_dir($directory);
   if (!$is_writable || !$is_directory) {