I am going to try this again. Last time I just had someone tell me to do what I said I already did.
The image uploader started to work, then broke a few days ago. Here is what happened: It will upload the image, I can enter in all information and even set as featured. When I choose "Insert into post" it closes the uploader and nothing happens.
I have disabled all plugins - No change
I have cleared all caches - No change
I have tried it in Theme Twenty-Ten - No change
I have deleted and re-installed 3.5
The image uploads. I have a "Featured Image" section in my WordPress theme. If I upload for Featured image that will get populated.