If you’re using Firefox and have Google Gears installed, deactivate/delete this add-on. It’s not compatible with Firefox 3 and can cause problems in WordPress.
Otherwise try deactivating all plugins and check to see if this resolves the problem. If it does, activate the plugins one by one – checking image insertion after each re-activation – until you find the problematic plugin(s).
I am having a similar issue. I was getting the error that asked if there was authorization to write to the folder. Fixed that issue by directing the uploads to wp-content/uploads. Now I’m getting this error:
The uploaded file could not be moved to /home/roboto/public_html/wp-content/uploads/2010/05
Change the permissions on the wp-content directory to 766. If you still have problems, try 767 or 777. Once your uploads are working, change the permissions on wp-content back to 755 again and check that everything still works OK.
http://codex.wordpress.org/Changing_File_Permissions
HEY! I actually found an answer that worked for me. I had to set the file attributes of wp-content, 2010, and 06 to 777. Before, I was just setting the uploads folder without doing the rest.
