Two problems, may or may not be linked.
A while ago a number of images disappeared from the site, they are still listed in the media library but no thumbnail and you can't do anything with them. The image files appear to be there on the server.
I've recently updated to 3.1.1., partly to see if there was a problem with the older version, all fine but no change to the image problem.
Now we are trying to add new images, when I upload there is a message saying "Unable to create directory /home/stillpocom/public_html/wp-content/uploads/2012/02. Is its parent directory writable by the server?"
I've checked all the relevant folder permissions, they all allow everything but public writing, switching that on doesn't affect the problem.