After pulling my hair out for a few days, I finally found a resolution to an issue where WordPress displays and upload error in whenever you try and upload media to the media library.
The problem occurs when the apache user can't write to a folder with permissions set to 755 (if I'm explaining that correctly).
After contacting MediaTemple, they informed me that I could set my service to use FastCGI instead of Apache. I logged into Plesk, navigated to my Subscriptions, then launched the control panel for the associated domain. One into the C-Panel, I clicked on Websites & Domains, then clicked on the domain. Under Web Scripting and Statistics, I changed PHP Support from Apache module to FastCGI application. Then, I restarted my service and voila...I'm not uploading images to the media library under 755 and not 777, which is a security risk.
For the instructions, go here: http://wiki.mediatemple.net/w/%28dv%29_4.0:Enable_FastCGI
You may have to complete a command line operation to set your folder recursively to 755, but I didn't have to do that. It just worked.
Now, my three full days of killing myself trying to figure this out is over! I will be implementing this across all my sites.
BTW, this is for 4.0. There are similar instruction for 3.0 and 3.5, but it's far easier with 4.0.