If you get an error:
Warning: is_dir() [function.is-dir]: open_basedir restriction in effect. File(/) is not within the allowed path(s):
In Settings “Media”, make sure the path is set to default wp-content/uploads
Anything else might give you an error.
This error was triggered when using WP eCommerce plugin, uploading a new product. Disabling the WP eCommerce plugin removed the error, but in order to have the plugin working error free, the above change needs to be made.