Thanks but clearly both the "data" and "uploads" directories and its contents are all 777.
As for path, I've checked it once again in the Admin Panel and everything is correct. Just tried uploading an image and it says:
Unable to create image: [/usr/local/apache2/htdocs/photopost/uploads/1/testimage.jpg]
But check this out. The path is correct and it's 777.
Content visible to verified customers only.
The error doesn't appear to indicate something can't be found. It says the image type isn't supported. Which part of the code would throw this error? How about we find out what it's trying to do first?