ok, nothing on the server side so far (still working on it), but I've found something interesting that may help shed a clue on what's wrong with my system..
I just tried commenting out:
echo "uploadSuccess event detected";
and it uploaded the first of any files selected for upload, but then hung on the rest (in 'pending' status) - and this time the first file does actually get written to my 'User' folder. And when I clicked submit, even though the other selected files did not get uploaded at all, the first image got written to the gallery from the Users folder. So now at least the flash uploader has proven that it can write to the server.
Any thoughts on where I should look now?