Have two installations with 3.01 and 3.0 WP and try to change image header at Appearence -> Header for custom-header ready themes. I get an error telling me that "Image can't be processed. Please try again".
Checked that exist blogs.dir and image files are uploaded there for child subdomain blogs and at /public_html/wp-content/uploads/2010/08 for main blog. .../uploads also have permissions.
Going to Multimedia section images appears there, but using themes like TwentyTen can't change header to it.
No problem to change to predefined theme images.
First try I even reach the crop page and choose a crop for the image. Next times it gives me the error directly without the crop step.
Checked with several images bigs and smalls, jpg, png and gif.