File Upload error, fatal exception line 254

My wife is having trouble uploading a picture to her website. She had the same problem the other night but the error went away later on and pictures would load normally through the flash uploader option. The problem reappeared today and I am unsure if it is a server issue through our hosting company or with wordpress. Currently when you are on a post and you select upload a picture you can select a file. Once it starts to upload the bar will run to 100% in the flash and browser loader then this error comes up.

Fatal error: Allowed memory size of 67108864 bytes exhausted (tried to allocate 13056 bytes) in /home/carrieh/public_html/sweetlife/wp-includes/media.php on line 254

The picture I tired is only 1.44 meg so I know it’s not to large. I’m not sure if the file media.php is just bad and I need to replace it or if it is an issue with the server. I can replace the file here shortly or try rolling back a version to. Anyone have any other ideas I can try I would appreciate it. Thank you.