I run a cpanel-based web server with a dozen or more wordpress users. ALL have the same prob with 3.01 upgrade. First it’s the /public.html problem then the css problem. I’ve updated PHP Upload Limits to 10 megs. I’ve chmod 777, removed and reinstalled /upgrade chomd’d 777… all the suggestions. Nothing works. Manual updates are a PIA and require excessive unbillable time. I’m recommending my users stay with 3.0. I additionally find the WP updates come way too often. Every other week there is a Dashboad Upload “demand” and it’s annoying, often unnecessary, time consuming, and – in this case – extremely problematic.
Enable Dashboard “turn off notifications”. When a major release is required then we’ll deal with it.