I have exactly the same issue and it’s driving me spare!
I am running WP3.05 and I have the site at home on a windows machine running wampserver. Here the uploads work fine.
However – on the webhost I get HTTP error using the flash uploader or Internal Server Error – The server encountered an internal error or misconfiguration and was unable to complete your request……
It uploads files below 130kB fine but rejects anything above about 200kB.
– I’ve increased ‘post_max_size’ and ‘upload_max_filesize’ to 16M in php.ini
– I’ve increased memory allocated to php via the wp-config.php file by adding define('WP_MEMORY_LIMIT', '256M');
– I’ve added an “.htaccess” file to the wp-admin folder with this code
<IfModule mod_security.c>
<Files async-upload.php>
SecFilterEngine Off
SecFilterScanPOST Off
</Files>
</IfModule>
– I’ve read that suhosin security software may be the problem but have no access to change it!
Aaaaargh! Any suggestions?