@hekolo and Global, do you have gd library enabled? Even if gd library is not availalbe, you can upload files. Try to upload an image and check whether you are seeing it resized, using the files plugin.

This error shows up as well when you try to upload a picture that is not in of the three required image formats (GIF, JPG or PNG). You can also try if you can upload a group icon the groups plugin. If that also fails then it's probably an error in the GD library as Team Webgalli mentioned. Check that using the phpinfo().

@Team WebgallI and M.R.A. Walkers: GD Library - That solved the problem. Thank you very much!