When upgrading my blogs to wordpress 2.9, I found that the image upload broke. After some fiddling around I managed to get a proper error message out of it, I managed to track down the error to the file wp-admin/includes/file.php, which used a ctype_ function that, for some reason, was disabled on my php version.
Funnily, the exact same bug has apparently been a problem on wordpress before, on version 2.5, in a different file.
Anyway, I fixed the problem. If anyone wants the fixed file, here it is:
Download the archive, unzip the file.php inside and replace the one in your wp-admin/includes folder with it.