Not uploading new media

I am having trouble uploading any new media – jpg’s and ppt.

I wonder if it has anything to do with having not upgraded to 3.0.1

And automatic back up isn’t working. I get this message:

Could not create directory.: /home/darag/public_html/wp-content/upgrade/wordpress-3.tmp

Installation Failed

So I wonder if the two things – not being able to upload media and not being able to automatically update are somehow connected.

I’m using Hostgator for hosting.

I’d appreciate any help on this one,
darag
ps I am a real novice so go simple with any instructions, please!