Setting your wordpress 2.5 to handle image or any type of media uploads is a bit tricky. I tried the instructions from the wordpress tutorial and still got this error: … Is its parent directory writable by the server?
If you have this problem even after you change your file attributes on the wp-content folder to 777. You have to change the permission in the folder wp-content/uploads to 777 as well. It should work after that.
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