When I try to upload an image using either flash or browser method
either in a post or in the media section
I get this error message

“flightofthehumpback.JPG” has failed to upload due to an error
The uploaded file could not be moved to /home/planetea/public_html/migaloo2.com/wp-content/uploads/2011/08.

I have checked the folder permissions are 755

Atahualpa ver 3.6.7
Wordpress ver 3.1
php version 4.1.22 (I know it sucks my host has not upgraded yet and I cant upgrade to the latest WP until they do)

Please help

Just an update - its also zip files not just images.

Try swapping to twenty ten and see if you can upload

Thanks for your reply. Yes I will try that. I have sort of figured out that it is not theme related and seems to me to be a server issue. Consider it solved unless I come back again. Thx.