I have somewhat of a follow-up: I had problems loading images on another wordpress site I just started, and my web server helped by setting permissions for the database WordPress uses. This solved the problem of image upload on that site. I asked what he did and here's his reply:
"The specific permissions change I'm making is a bit technical, but what it amounts to is giving the anonymous user account, under which the web server runs, read/write permission to all of the files in the WordPress install. Since WordPress runs as this anonymous user when it's doing various operations on your site (file uploads, etc.), this usually takes care of providing the needed privileges so things work right."
Anyway, this is only a partial answer, because he re-set permissions on my original WordPress site as well, and I still have trouble with that. On that site, the images files do not upload (do not appear in /Uploads), but a box of the correct size does appear, it's just blanked out with the "no image" symbol. When I FTP an image directly into the Uploads folder, it does upload and appear in the folder now, but still appears blank in WordPress.
Does anyone else experience this problem? Kapokberlin, are you still having the issue?