I tried with 3.2.1 WordPress and works sleek.
But with 3.3.1 version, it gives the "Failed upload test" message on editing the post.
I explained my "via-crucis" with detail in this post:
Ech update in wordpress is a PAIN. We never know what plugin will put us in trouble with incompatibilities.
What about a system to warn which plugin will stop working along the upgrade in WordPress BEFORE the upgrade, like firefox?