Hi Sansonaye, and thanks for the kind words.
It sounds like it's trying to use a full http:// path to create the minified file rather than the absolute path on the server (so neither invalid file, nor directory permissions).
Magicmin will accept a file TO minify with an http path, but it can't create the output file there, so it sounds as though the output filename/path may just need to be corrected.
If you're using a CMS such as wordpress or codeigniter, you may find it easier to use this type of implementation:
gist.github.com/bennettstone/d2a08c ... (I've included the function I use and some example implementation)