Hi
There's a number of posts reporting problems with image uploading, and this has been driving me mad for the past few days.
Following a link that's well-hidden in an earlier post, I tracked this down to the 'tagaroo' plug in. There is now a new version of this (1.3) which appears to fix the problem - in my case, anyway.
As I'd been hunting this down for a while, I hoped it might help others if I highlighted this in a separate post.