Catching up on my feeds this morning (it's been a while) I caught this item from the Ecto blog on the whole WP 2 upload issue.  They have a simple work around, if you can edit your WP 2 files, that I've tested on one of my blogs and it seems to work well:
 
UPDATE: After a few back and forth emails with Ryan Boren from WPvia the above mailing-list, fixes were made and uploads now work again.To get the current 2.0 working, please apply the following changes to wp-includes/functions-post.php:

Replace line 897:

$new_file = $uploads['path'] . "/$filename";

with:

$new_file = $upload['path'] . "/$filename";

Yes, that's one single 's' you have to remove...

Replace line 912:

return array('file' => $new_file, 'url' => $url);

with

return array('file' => $new_file, 'url' => $url, 'error' => false);

However... with these fixes in place, you cannot specify destinationdirectories anymore. In ecto, if you reveal the attachment settingssheet, you must leave the “Destination:” field blank. Ifyou prefer to specify your own upload sub-directories, use the xmlrpc.php file from an earlier 2.0 beta version, which I kept around.

Now ... this is a temporary fix.  I hope that the WP folks will get back to all of us in the offline editor space soon with a game plan.  Regardless ... kudos to Ecto and thanks for the tip.

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