Me too. Mine is telling me
"Unable to create directory /wp-content/uploads/2008/12. Is its parent directory writable by the server?"
The first odd note was that there's no button for me to click for Flash upload. So, I'm using the browser upload... or trying to, anyway.
I checked permissions and changed everything to 777, up through wp-contents.
I manually created the 2008/12/ directory with CHMOD 777. That didn't help, either.
I tried manually uploading the image to my 2008/11/ directory. (Hey, it was worth a try.) The Media Files don't show the image.
I tried uploading the image through the Media Files tab, not through the Post. I didn't get an error message, but after it appeared to upload, the image didn't show up in my files. (I also checked through FTP, just in case.)
I deactivated every plugin. Nope, it still won't upload images.
The site was working fine before the 2.7 upgrade. I hadn't uploaded new images since November, and I can still use the old images but I can't add new ones.
Weirdly, several of my other WP 2.7 upgrades are working fine on the same server (HostGator) with the same theme (Branford Magazine) and same plugins.
Any other ideas?
30 MINUTES LATER: I manually upgraded 2.7, just to be sure it's working. The Flash button has returned to my "Add an Image" screen in Post. However, I'm still unable to upload images. Same error message, no matter what I try. Help...?