thanks for your reply Adam,
i dl the latest build, but i dont think that was the problem-
after adding the below to my web.config and creating an uploadtemp folder in my app (with permissions for network service) i was able to upload without issue...
<httpModules>
<add name="CuteEditor.UploadModule" type="CuteEditor.UploadModule,CuteEditor"/>
</httpModules>