I can't upload images: The selected file could not be copied, because no file by that name exists. Please check that you suppli

I try to upload an image using image-assist or create content->image, and with decent sized images, it just returns a blank page (if I use image-assist, the blank page is called index.php).

If I use a small image, on preview it says something about regenerating an image - I assume that's the thumbnail (I saved that image without one). And it does create an page at that point (I checked recent posts), but when I hit submit, it comes back with:
The selected file could not be copied, because no file by that name exists. Please check that you supplied the correct filename.
It then creates another node, that has the thumbnail, but no image.
Since the first one works, I guess I could just be very careful to always get it right before hitting preview, but shouldn't it wait until hit submit, before it submits it? I tried doing it with promote to front page, and it shows the good node on the FP after I hit preview, and an identical teaser for the broken node after I submit.

Plus, I really need the decent sized pictures to work too. I could try and edit them into something that works, but I have no idea what is breaking on them. They make it to the server fine (.../files/images/temp/ ).

I don't have any clue what I'm doing wrong, so here's a list of things I've checked:

I'm running Drupal 5.2, with Image 5.x-1.4.

I checked that the image is set to published, and under admin->site config->image-* everything is reset to defaults other than the max size is set a 3000K.

Admin->by-module permissions look fine.

Oh, and I can go back and re-edit an image node, and it doesn't create a new node then.

Other modules installed: calendar, CCK, Date, Javascript tools, Meta tags, Update status, Views.