Image Uploading and WordPress

I was having some issues with WordPress and the image uploading function, every time I uploaded an image I'd get an error telling me that the thumbnail wasn't found. Taking a look at the code in wp-admin/admin-functions.php (starting at line 750 or so) made me realize that I had a similar error on this server when trying out PixelPost. And the fix was exactly the same.

I just checked and there is a fix up on Trac so it should be good to go with the next release. But, if you need to fix it now open up admin-functions.php and look for (around line 750 or so):

$thumbpath = str_replace(basename($file), $thumb, $file);

just after it insert:

touch("$thumbpath");

And you should be all set.