Directory.CreateDirectory() Issues

When my directory exists under c:\inetpub\wwwroot\docs with the ASPNET User account having full access and I try to add a directory c:\inetpub\wwwroot\docs\newDir this method throws an UnauthorizedAccessException. When I move the directory to c:\docs and give the ASPNET User account full access it works fine???????? My related problem is if the documents are put in a with a tag the file won't be opened (Page not found). The mouseOver shows file:\\\c:\docs\myWord.doc. If I place the directory at c:\inetpub\wwwroot\myApp\Docs and code the then the document can be opened in Ms Word?????