I'm not sure if this is "new" behavior as I didn't use the upload functions until after I updated to latest version! 2.2.1
I do have 2.2 installed on another domain with the same hosting service and it doesn't have this problem.
The files upload but then the upload section gets replaced with this error, and yes I get the gif file error that corrisponds to gif file uploads too!
Warning: imagejpeg(): Unable to access /home/www/lcrwc/wp-content/secret/2007/07/image004.thumbnail.jpg in /home/www/lcrwc/wp-admin/admin-functions.php on line 2310
Warning: imagejpeg(): Invalid filename '/home/www/lcrwc/wp-content/secret/2007/07/image004.thumbnail.jpg' in /home/www/lcrwc/wp-admin/admin-functions.php on line 2310
Warning: Cannot modify header information - headers already sent by (output started at /home/www/lcrwc/wp-admin/admin-functions.php:2310) in /home/www/lcrwc/wp-includes/pluggable.php on line 331