Did you read and follow
all the directions in the
documentation? If so, you shouldn't have any problems if all you've done is upgrade to the latest version of phpdig.
Are you getting some sort of error, or is it just not following links that you think it should? Perhaps if you posted one of those links, someone might be able to help you.
As to the write permissions you asked about on the designated folders, phpdig won't work without that being properly set.
Tell us what you've done so far, and we'll go from there.