Media Library … Can’t do a single thing!

I’ve read websites that say “One of the nicest enhancements in the latest version of WordPress is the new Media Library.” … pardon me – but I couldn’t disagree more!

Since this “feature” was added NONE of my users (NOR ME) have been able to upload a single file to our WP blogs. Neither the browser or flash mode work.

I try uploading through the Media Library and nothing appears in the Library, I try uploading when in a page or post, and get an error message saying:

The uploaded file could not be moved to (serverpath)/httpdocs/wp-content.

I can’t find a directory called uploads or media or anything. How does anyone get this thing to work … or at least where should the media files exist so I can FTP them to the server?

Thanks for any help you can offer.