[your user name] --> Documents -->

Electronic Arts --> TheSims Castaway Stories --> Downloads
That's with Vista. It's basically the same path as for The Sims 2 (everything up to the smilie). Not sure if you have to make the Downloads folder yourself, but make sure it is spelled that way.
Default replacement eyes and skins should work fine. I've got my regular defaults in, as I'm not very fond of Maxis...
Not sure about sub-folders, though.