They aren't big images.
The following error occurred
There was a problem uploading your file.
C3PO.jpg
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The following error occurred
There was a problem uploading your file.
C3PO.jpg
If it was an image size issue, it should tell you the image is too large for the server to process.
Does the console give you any information? (firebug or Chrome developer)
Are you able to upload the same image here?
Yes it is, but the rest of the Xenforo install works fine.another thing....is the sandbox site behind .htaccess ?