This is the dreaded error code that I got when I tried to upload an image to my blog!
There doesn't seem to be a "set" definition as to why this kind of error occurs when I try to upload an image to my blog. This blog error has been happening the last few times that I have tried to upload an image to my blog. Usually I just forget about and subsequently in a few days I'm able to upload the image(s).
We are aware of this problem and currently working on a fix.
October 24, 2007 - Well it took two days but I was able to upload an image to one of my blogs today. This is quite indicative of this kind of error problem that blogger has in regards to being able to upload an image.
Although there is no specific definition of this kind of error code, my advice would be for you to save a copy of the image that you want to upload to your blog and then just wait until you can be able to upload it - which should only take a few days - when the problem of being able to upload it isn't a problem anymore.