Do you have an error when you say they cant upload??
If they get uplimit warning then there usergroup setting for uploads perday is not set to 0 which is unlimited.
As far as your categories settings there are 7 categories I see that registered users are not allow to upload to as this is how you have it set
Is this intentional?
What usergroup do these users belong to that cant upload etc? anything for us to work with? I notice you have several custom usergroups