Solved: Wordpress Errors When Uploading Media Images and Photos: Folder Creation and Permissions
If you are receiving error messages in your Wordpress admin dashboard every time you try to upload a media file (a photo or image), then go to "Settings" and then "Media" and add a check mark to the box that says "Organize my uploads into month- and year-based folders."
Next use FTP or your browser-based file manager to create a folder named "uploads" in your wp-content folder. Make sure that the permissions for the "uploads" folder are set to 777 (writable) and then create the sub-folders for the year and months and make them writable (permissions = 777) as well. For example, if the date is September 2011, create a sub-folder called "2011" (without the quotation marks) in "uploads" and set its permissions to 777. Then create sub-folders 09, 10, 11, 12 for the months within the sub-folder "2011" and make them writable (777).
You will have to manually create the 2012 folder and its sub-folders and set their permissions to 777 since your web host has security settings that stop Wordpress from creating new folders.
You might want to talk to your web host.