Mon 04 May 2009 11:40:39 ICT - IMG_resizeImage: Original (/tmp/phpwtL7IS) is smaller than target, original copied to target image (/home/hosting/public_html/domain/mediagallery/mediaobjects/covers/cover_2.jpg.
Mon 04 May 2009 12:16:14 ICT - Media Upload - Error moving uploaded file in generic processing....
Mon 04 May 2009 12:16:14 ICT - Media Upload - Unable to copy file to: /home/hosting/public_html/domain/mediagallery/tmp//news20090504121614298.tmp
Mon 04 May 2009 12:16:14 ICT - MG Upload: Problem uploading a media object
So glad to find this topic here. I moved my site up one directory level and renamed the private folder. Afterwards I thought I had found all the places to make path changes but still got this same error. I made the change recommended here and the problem is now resolved. Excellent!