Error: can't upload media – "can't be moved to home/.." no updates done!

From the editor of: http://www.iknowthatmagazine.com

I am not able to upload new photoes to posts, the error being:

Error “**name of photo**”
The uploaded file could not be moved to /home/2/i/iknowthatmagazin/www/wp-content/uploads/2013/07.

I have not updated/upgraded worpress, in fact I am not able to do that neither:

Downloading update from http://wordpress.org/wordpress-3.5.2-partial-1.zip…
Unpacking the update…
/home/2/i/iknowthatmagazin/www/wp-content/upgrade/wordpress-3.tmp
Installation Failed
Could not create directory.

I am using HotTopix Theme and all of my plugins appear to be inactive.

I can still use old photoes from media library.

Any help appreciated as I am running a new online magazine and articles need daily photoes uploaded.

I do have a lot of photoes in the library – could this be an issue?

Thank you!
Tove