I posted this in another thread. It won't help now that some people are already having problems, but it might help those who might be upgrading.
I wonder if the problem is due to the way the upgrade was done. I went from 2.3.2 directly to 2.5.1 using the very tedious long method, which required me to manually delete and move files around. I hated it but I wanted to make sure that nothing went wrong, even if I did have to spend 2 hours doing the upgrade.
For those who are not able to upload your images, did you do the quick 3-step upgrade or, rather, the long way?
So far, I haven't had any problems with my test posts and image uploads using the tediously long method at upgrading. I'm waiting to see if the other authors of my site will encounter any problems when they do their posts and image uploads. Problems may or may not show up then, but right now, things seem to be all right.