I had this problem with WordPress 2.5.1 when trying to upload files: “An error occurred in the upload. Please try again later.”. I found many solutions, some asks that you edit the .htaccess file. It might work for you but it did not fix it for more. Another possible cause is a Firefox bug but I tried to upload using Safari but I got the same error. I found that the problem was the “Flash Uploader” tool. So I used this plugin to disable the Flash Uploader. And upload is now working properly. I hope this helps you with your own WordPress blog.
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