Http error when uploading images

Hi, when uploading an image bigger than 600 pixels, I am getting a http error when using the flash uploader and an internal server error when using the browser uploader.

When using the flash uploader I then see the image in gallery, however it has no resize options and doesnt seem to recognise the original dimensions?

This seems to have nothing to do with filesize as an image 1000pixels wide but with lots of compression making it about 20k still doesnt work.

Smaller images work fine so I know it is nothing to do with upload folders or chmod.

thanks