If you look at the Karma ratings I have the label 'specialist' as I have posted replies on between 250 and 499 threads.
You can look up these ratings by going to the "Auctiva community page -> personal zone" and selecting "karma" from the list on the left to show the levels you can climb to as you actively take part on these boards.
I am just saying relative to your problem that in my opinion it is better to :-
1) take the pictures initally at the maximum and no more resolution than you need to (I think many digital cameras have the option to take pictures at more than one resolution)
2) process them down to the required size before uploading (including any correction, cropping and specialised watermarking)
3) upload in bulk the result.
Reasons :-
1) It will always be quicker to process images on your PC so long it is of reasonable perfomance (IMHO) e.g. processor faster then 1Ghz than to do it over an internet or even a LAN connection on your own network.
2) The smaller the file to upload the quicker it is.
3) You have the processed images available for future use.
I have taken, processed and uploaded a few thousand pictures for my listings using this approach with few problems using XP/IE6 relatively cheap camera, cheap image processing tools and probably the best part of a thousand images with Auctiva's excellent multiple image uploader for IE. (because I only joined them last year)
Will the problem be fixed, I do not know many problems are finger trouble or browser/firewall/cookie setup problems on users PC's. You probably need to file a support request if it persists.