As seen in http://moodle.org/mod/forum/discuss.php?d=90710 :
Before I go on, I will make this very clear...the permissions ARE set correctly, the path to the moodle data IS correct.
We've had Moodle working for quite some time now on PHP4. We took the decision to upgrade to 5.25 which went fine, but we now get the following error randomly when we use Moodle:
ERROR: You need to create the directory E:\moodledata with web server write access
Everything works ok, but we don't want the path of the moodle data being published like this.
Anyone know why this is happening? PHP reports no errors, Moodle logs report no errors.