Image Uploader problem

I can upload an image it shows the progress, then it’s gone and nothing happens… it appears on the server and is correct file size. However I cannot view the file, I can’t remove it. I can’t do anything with it.
If I stop the webserver, then I can delete the file.
The file doesn’t appear on in the media library.. what’s wrong?

I’m using winxp, latest apache, and latest wordpress.. (2.8.5)
Have always had this problem.

I’ve tried both the flash uploader and the html uploader, same problem with both.