This is really bizarre. I was having the problem with uploading images, which I fixed with the .htaccess fix from the sticky, but clicking on the Insert into Post button failed (got a generic website configuration 500 error page, but nothing interesting in the log).
In the course of investigating this, I found that if I put the words "Insert into Post" in the editor and try to save the post...it blows up! (same 500 error).
It doesn't matter whether there are other words in the post, and it has to be those words in that order. "Insert in Post" is ok, "Post into Insert" is ok, etc. But "Insert into Post" throws an error every time.
Further experiment seems to show that it's "Insert into" itself that's the culprit. If I break those up with non-whitespace, it works instead of erroring. It appears that somewhere there's a regex that's scanning the incoming text on a save and picking out "Insert into", maybe thinking it's an SQL statement?