Just created a new hosting account with one of the WP.org recommended hosting companies and provisioned my new WP2.5 site via Fantastico earlier today.
While my test site on http://www.wordpress.com uploads a graphic into a Post or Page without difficulty, this process fails miserably on my new, hosted site.
In a Post | Page, when ADD MEDIA, then ADD AN IMAGE is clicked, the Flash uploader says "Crunching" for about 5 minutes, then quits without uploading anything.
Any ideas? Help! And THANKS!