BuddyPress.org

@bpinspire I had this issue on my WP 2.9 setup and I fixed it like so:

1. Go to Settings > Miscellaneous
2. Blank out: “Store uploads in this folder”
3. Fill out: “Full URL path to files”

Not sure why the default wp-content/uploads doesn’t work, never took the time to report it as a bug to see if it was my server or WordPress or BuddyPress at fault.