bwmorph() works fine for me. What are you passing it? In general, functions that are preceded with "im" work for grayscale and/or color images, while those starting with "bw" for for only logical images - only pure black and pure white, hence the prefix bw. So I'm not sure why you think it's an inappropriate name. For example imerode() is appropriate since it not only works with binary, logical images, it also works with grayscale images (to produce a local minimum image).
If you can't even get it to run the examples from the help, then you should try "restoredefaultpath" and if that doesn't work, reinstall. If it still doesn't work, call tech support and ask for Installation. It will be free I believe, since it didn't install right.
