See Knowledge Base article Q218571 at http://support.microsoft.com/default.aspx?scid=kb;en-us;Q218571&id=218571&SD

You need to make sure that users have read/write permissions on the files mentioned, but make sure your users do not have delete permissions on the files mentioned. Apparently if they have delete permission, Org Chart will delete the files the next time it starts, but because of the folder permissions, the files won't be created.