3.2.1 – Can't edit posts or upload photos

Since upgrading to 3.2.1 I have been having problems with writing pages and posts.
as soon as I upgraded I couldn’t edit my posts as easily and would have to use the HTML version to add a new line. The preview is different to what i see on my visual version of what i am writing too.
Now I can’t upload photos at all, although this part seemed fine until yesterday. I am getting ‘HTTP Error’ when I try to upload an image. the upload gets stuck while crunching.
I have tried both uploaders and neither work.

Any suggestions?

many thanks.