Linoy Joseph

The first thing you would look for is a 766 or 777 permision. But probably you will still have the problem.their are other two things you should look forchanging the “Store uploads in this folder” setting (in Settings->Miscellaneous) from “/wp-content/uploads” to “wp-content/uploads”.

the most probable chance of error is,

Is you have safe mode turned on? dont turn it off, its safer to be on.
Apache runs as user ‘apache’, so that the directory created by php scripts belong to the user apache. If you have enabled php safemode, php scripts will not allow the owner of the root folder to write anything in the files belonging to another user (in this case – apache). What would solve the problem is to set the root of your blog to the user apache

 [Root @ user www] # chown-R apache: html *

where html is the root folder of your blog
This should solve the problem