Thanks for your response and ideas BUT
1. Yes I know it automatically sets year etc BUT this is 2009 NOT 2004. It suddenly created a folder for a year that has passed ages ago. That is bizarre to say the least.
2. None of the themes I have on these sites have css that effects this but I think this was my mistake and it's possibly the NextGen Gallery that's causing problems with alignment. I will check there for support.
3. As I said, I checked in the control panel and several images were missing. I also checked via ftp - again, no images.
They're not corrupted. We're talking about a lot of images in different websites. They all worked fine on my previous installations using a different cms.
But thanks again for your suggestions! I appreciate the feedback.
I just went into a website to edit a page and discovered the image I had uploaded there a while ago has disappeared. This time it IS on the server and the url to it in the code is correct. I tried setting everything to 777 EXCEPT the /wp_content folder and that didn't help. When I open the media manager several files that are on the server don't appear there.
The next thing I'm going to try is setting up my own images folder and using the option to get the image from a url - don't know if that will make any difference tho LOL
I bet there is something really obvious that I'm missing :)