1. Do like Ami says here and put that QA_BLOBS_DIRECTORY line in your config.
2. The directory can be anywhere on your server. If you put for example a "files" folder in your site root, you can use:
define('QA_BLOBS_DIRECTORY', $_SERVER['DOCUMENT_ROOT'].'/files');
Then make it writable (chmod 777), you can do that via FTP.