I upgraded to 2.5 yesterday and have the same problem. I always edit my photos to be 1000px at the longest point (width for regular pics and height for vertical pics)and let the other dimension resize proportionally. I always have used firefox, now when i try and upload i get stuck at the crunching stage and get the HTTP error. I decided to try IE6 to see if I was able to upload there, and I was able to, although IE doesn’t create a thumbnail so I was not able to insert the pic in to the post. (also noted that i couldnt see any thumbnails in IE, even for previously uploaded photos, nor could i click on the “show” link) But once i went back to firefox, i could see the thumbnails and finish posting.
As per the posts above, I tried making my files really small and uploading via firefox. Unsuccessful, even when i made the file 175×175 and it was 48kb
