Typically no files in the index folder means it cannot write them, ie the user that is the identity on the app pool must have full control over that folder.
However if you are using multiple web nodes and a load balancer there can be additional concerns. You should probably read Implementation Considerations for Web Farms. You may not have good luck with our internal search engine in your environment (since it does not claim to support multiple processes accessing the index) and may be better off using google or bing for site search.