BuddyPress.org

Just thought I’d mention that I had this issue and solved it by checking that the blogs.dir folder AND ALL SUBFOLDERS, RECURSIVELY, were set to ownership by ‘apache’ and had 775 permissions.

This took some time to trouble shoot, as it turned out my host was only setting the blogs.dir folder to ownership by ‘apache’ and not its sub-folders. I had to specifically ask a second tech support guy to check the sub-folders for me before I figured this out.

‘apache’ needs to be the owner on apache machines, the rest should have the main ftp user as the owner (you may have to enable group permissions so you can still edit them)

I Hope this article I wrote helps: http://erikshosting.com/wordpress-tips-code/buddypress-avatar-upload-failed-fix/