Drupal's image module failed when I tried to use it to upload images to a Drupal installation at a Powweb.com hosting account.
After some digging and searching, it turns out that Powweb's base version of php.ini does not include setting the 'upload_tmp_dir' variable. Trying to set that using Drupal's settings.php or in .htaccess didn't work (discussion). Instead, I got the error described here.