I was able to change permissions on the undex.html file inside the data folder and now everything uploads correctly.
And yes the system will not allow me to upload a 2.53 MB (2,654,208 bytes) file taken directly from a camera.
So that brings up a question. On the new ad page where it says "Images of product to upload (if any, leave blank if not)
Photo ads get alot more exposure!:" where do I find that so that I can put a note in about max file size etc..