Image – Unable to upload specified file

I’m such a newbie at this – so apologies in advance.

I have the new 2.5 version of WP and when I click on ‘media’ to upload an image, I browse my pc, find the image, click upload and then I get the message ‘specified file failed upload test’.

I’m at a complete loss. I have no plug-ins at all.

Also, is this media thing part of the new 2.5 version? I used to just add pics from underneath the post but that facility has vanished. Please can someone help – my eyes are fried from reading so many different posts/solutions etc but I’ve found none that mention this problem.

Many Thanks
Nikki