I have changed the image uploader for adding blog images. When you press the "Click to add an image", a small popup box will allow you to add images from your computer or from a link.
I think it works a lot better than the old image uploader. I am still seeing an issue when you upload LARGE files sizes. I am working on this.
** UPDATE: There seems to be a lot of angst with this image uploader. I am going to be adding a new one either tonight or tomorrow. **
** New Image Uploader installed. I believe it works wonderfully! **