You might encounter an error saying something like:
“Unable to create directory /nfs/05/username/wp-content/uploads/2011/03. Is its parent directory writable by the server?”
Naturally, the first thing we’d try to do is change the /uploads/ directory permissions to 777. Here’s a way to fix the error without having to CHMOD directories.
Goto Settings > Media from your WP Dashboard and change” to “wp-content/uploads”
PS: NOT “/wp-content/uploads” or “/nfs/05/username/wp-content/uploads/”
Please note that there is NO forward slash before wp-content/uploads. Hope this solves the media upload problem. Else, try CHMOD’in the uploads/ directory to 777.
Source: TRLocke’s suggestion found at WP Forum