@keesiemeijer - I performed a manual update just like I normally do for all releases. I was updating from the latest 3.2.x version. I triple checked file permissions to verify that they were correct, and as I said before I haven't changed them since I setup the blog.
@Ipstenu - like madvibes, I also have plenty of files in my wp-content/uploads/2011/12 folder, and file uploading was working fine the day before I performed the upgrade to 3.3.
I fired up Procmon to take a look at what might be happening when I do a file upload and I'm seeing some references to a possible buffer overflow:
Procmon Screen Capture
That is what Procmon shows while I'm trying to upload a featured image. This is after I give full permissions to the Everyone user on both the PHP temp folder and the /wp-content/uploads folder.
I've double checked the php.ini file to ensure larger files are allowed to be uploaded, and I have upload_max_filesize = 2M. I've also checked the web.config that IIS is using and it has maxRequestLength configured to 4096 (4 MB). The file I'm uploading is somewhere in the 70 KB range, so I know that's not the issue.
I've also tried the standard file upload as opposed to the new fancy upload and I get the same result.
Any help is appreciated! I have to think it's a problem with the new code since nothing has changed on my end, but I guess that is yet to be determined.
Thanks!