I had a problem with media uploads, resulting in the message 'An error occurred in the upload. Please try again later.'
This seems to be quite a common problem here on the forums.
I looked into it and found a solution for my scenario. Please note this is a generic 'default error' message though, so if your scenario is different my solution may not be useful.
I narrowed the problem down to posts from the front page of blog sites (using the P2 theme in my case) by users with Author roles.
I documented the problem and two possible solutions here: