imagecache permission issue

I am new to Drupal but here is what i'm trying to do and the problem i'm having.

What i'm trying to do:
I'm trying to create a page with thumbnail images that can be clicked to expand in lightbox2. I have imagecache modules and lightbox2 modules installed. I created a image field of type file to the PAGE content type and have the images stored in sites/default/files/images. I also created a imagecache preset that is called thumbnail that is suppose to shrink the images to 25% of there size. I have set the display field for the PAGE content type to be lightbox2: thumbnail --> original. So now when I create a PAGE content type and attach an image the webpage should display a 25% scaled image that when clicked should expand to its full size in a lightbox2 window.

Here is the problem:
When i viewed the page It just had a link to open the page in a lightbox and no thumbnail image that is scaled to 25% was shown. I looked at the page source and it showed the path to thumbnail image as default/files/imagecache/thumbnail/images/image.jpg however when I looked in the files there was no thumbnail/images/image.jpg. So i created the directories manually and added the image there and it shows up but is not a thumbnail image. I'm guessing this is because I put the original size image and not the scaled one that the imagecache was suppose to create. I figured its a permissions issue and thats why the directory and image were not created and tried setting the permissions for the folder but it says I cannot b/c the folder is owned by "www-data".

My questions:
1. How do I set permissions to fix this problem to have imagecache make the directories and images on its own?
2. Also I noticed that the images that do show up when i make this change are not there when I log off the back end as admin and view the web page. Is there a particular reason for this?

Thank you in advance for the help.