You need to set uploads to yes in the global setting of edit usergroups and you refine them in edit categories.
If you only set one usergroup to be able to upload in edit categories only that usergroup can upload to that cat. The category drop down box on upload will only have categories listed they can upload to.
That is what we mean by edit cats refining permissions. Because the global upload setting lets users upload and then you go to edit cats to refine and set which cats they can or can not upload too.