Same problem with me. Everything with uploding images or files is working flawlessly on mij local xampp server. I could get it partly working on my live shared hosting provider (with by the way by years never have given me any problems when trying out lot of CMS/CMF applications) with version 2.5 after the solution mentioned above at Alanp. Since version 2.6 even that is no longer working. The strange thing is that i get, just like Beate, js errors, with is not happening on mij local site. All the Apache en PHP requirements are fulfilled on both servers. The only difference: local server PHP 5.63, hosted server PHP 5.3.29.
Very pity, because I love the clearness of the PW system, wich is now nut usable for me.