The media uploader in 2.5 didn't work at all for us. After you've browsed to a file to upload, it would upload but the flash box would then get stuck with a html error at the bottom of the screen.
In 2.5.1 it works better. It now uploads fine and comes up with the options to put the image in your posts. However after you've done this, the uploader locks with a html error again - this time 'Object does not support this property or method'. The files have uploaded fine but it won't put them into posts.
I've switched off all plugins, deleted all old files before upgrading etc.