Photo Issues Upgrading to WP 2.0.4

Hello, I upgraded to WP 2.0.4 a few days ago and now I am having trouble uploading photos into WP like I have done previously.

I can browse for the photo, but when I press upload it then says “The uploaded file could not be moved to .”

I can still post an image in my blog by linking directly to it, but i enjoy being able to upload the pics for consistency.

I already made sure that my folders were writable, and that did not solve the issue.

I really appreciate any assistance.

Any ideas??

Thanks so much –

Cal