I have tested upload on a normal site and dont see any issues. Nor has anyone else reported any issues. If I look at your site none of the ads that I see have images except for a few.
Now looking deeper at your site it appears to me possibly you ran an upgrade you where not suppose to run more a total of 4 times which is why the images dont show. Look here http://www.dragracingclassifieds.com...RT3_Delay1.JPG
Thats a link in your program to an image. However note the 4 zero's in front which should not be there http://www.dragracingclassifieds.com...RT3_Delay1.JPG
Now that image displays. You I suppose where only suppose to run the 2.5-2.6 upgrade and you ran the 2.4-2.5 upgrade 4 times which is a no-no.
Your only way to get back images would be to restore the cp_products table of your mysql database and only run the 2.5-2.6 upgrade.