I am running 3.2.1 with a local install and I'm having issues uploading anything. I'm getting the error message "Unable to create directory C:\Program Files\Ampps\www\wp/c:/program files/ampps/www/wp/wp-content/upload/2011/11. Is its parent directory writable by the server?" I have opened the local folder, taken it off read-only, and it still resorts back to read-only. I don't know if this is causing the issue or if something else is causing this problem.
Any suggestions or help would be greatly appreciated.