It seems many WordPress users run into an image upload error with the media uploader. The error message are “An error occurred in the upload. Please try again later” or “HTTP error”.
It seems that this error occurs because of permission settings in “.htaccess” file of the top WP directory.
There are some plug-ins available for this problem, but if you feel comfortable with editing .htaccess file, please go ahead and add these lines:
Editing .htaccess file should be pretty simple when you have an access to FTP.