CSS/jQuery not showing in Drupal 7 when upgraded from 6
Theming system as a little bit changed on Drupal 7. You should give a look at that page for more informations.

For your file-system problem, you should check the configuration of File system and see where is trying to put the files from the temporary folder.

By default Drupal tries to put that into sites/default/files, so check if the rights of this folder as write/execute/read for the owner and the groupe and if the group is at least the web server.

Also, maybe this problem with file-system can likely fixe your CSS/jQuery problem. So try to fix it before read the documentation from the new theming changes on Drupal 7.