FreshTrailers Theme Thumbnail error…

I just installed the Fresh Trailers WordPress theme and I keep getting this error when I click the upload button to add a new cover the posts:

Server Response:
<b>Warning</b>: move_uploaded_file(/home/public_html/film/wp-content/themes/fresh_trailers_v2/uploads/the-hangover-part-ii-original.jpg) [function.move-uploaded-file]: failed to open stream: No such file or directory in <b>/home/jessetec/public_html/film/wp-content/themes/hulu-clone/uploadify.php</b> on line <b>16</b>

<b>Warning</b>: move_uploaded_file() [function.move-uploaded-file]: Unable to move ‘/tmp/phpy91dRZ’ to ‘/home/public_html/film/wp-content/themes/fresh_trailers_v2/uploads/the-hangover-part-ii-original.jpg’ in <b>/home/public_html/film/wp-content/themes/hulu-clone/uploadify.php</b> on line <b>16</b>
1
There was a problem uploading the file, please try again later
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I tried setting the cache and other folders to 777 but no change… Any ideas?