It seems I was too quick to jump the gun, the problem I was experiencing seems to be because I only uploaded 1x smilie and then tried the 'more' button. It seems you need to add more than one extra smilie and then the 'more' button works.

Can I just ask when you go to yoursite.com/images you see a page with links

Index of /images

Parent Directory
avatars
smilies
uploads

Is there anyway to stop non users from seeing all these links without breaking the site? At the moment I have the images folder set to 0755 and the folders within that set to 0755