New photos not showing in posts after upgrading to 3.0.1

Hi all. I am having this problem. Old photos on my site before I upgraded are working fine. But since upgrading to 3.0.1 no images display when I upload them in a post. I thought it was the theme i chose. but i have switched to more than 2 other themes and image is still not showing when I upload. Is this a .htaccess problem? any help will be greatly appreciated. Many thanks.