If the R system library location is not writable, RKWard will offer to install to ~/.rkward/library, instead. This is not very clever, among other things because it defeat R library versioning. Instead it should offer to install to the default R user lib-loc. This appears to be getenv("R_LIBS_USER"), but careful checking will be needed, whether this is the correct value on all platforms and configs.
Fixed in git / 0.7.1