Getting error: The selected file test.txt could not be uploaded. Only files with the following extensions are allowed: jpg jpeg

The full error during file upload is: The selected file test.txt could not be uploaded. Only files with the following extensions are allowed: jpg jpeg gif png txt doc xls pdf ppt pps odt ods odp docx
Drupal 6.22
PHP 5.3.8
IIS7.5
The default user that is setup does not have this problem. That user can upload files with no errors. All other users, regardless of permissions that were setup after install, get this error during upload of any file regardless of extension. Please help.