I've searched and have found many people are having this problem, or have had this problem. Some were able to fix it but manually creating the upload directory under the wp-content directory. My problem is a bit different as I am using godaddy to host my site and purchased the domain from WP/Automattic: My specific error mesage is:
Unable to create directory /home/content/e/a/t/eatsigns/html/wp-content/uploads/2008/03. Is its parent directory writable by the server?
My domain is wtfsigns.com -- not eatsigns; obviously the rror appears when I attempt to upload a file.
My posts are fine otherwise.