Problem with images. Thumbnail images appear and dissapear after save

[joknight]

When i upload an image the thumbnail disappears as soon as i save the page, it just reverts to image name text - (yes, i have the create thumbnail set in config)

Also the category thumbnails only show the vmgeneralnoimage.gif

When uploading the main product image, after choosing the file to upload should I just hit save in the upper right? there is no "upload" button for the image next to "browse".
I've attached a screenshot
Usually, I browse and hit "apply" the thumbnail shows on both admin section and cart then I hit "save" and it disappears.

Virtuemart Version 2.0
joomla 1.5.25

[attachment cleanup by admin]