GD library has high memory requirements. Try ImageMagick instead of GD library in the Tidypics settings. If it's not already installed on your server, you need to to do that first though. Check if the "convert" command is available. If it is, ImageMagick is installed.

You have the max upload size set to 100M but the max memory size is only 64M. Change the memory_limit setting in your .htaccess file to 128M or so.

Hi, iionly, unfortunately imagemagick isn't installed on the server.

Brett, you're a star! It's working fine now! I've spent the whole day trawling round plesk and the server looking for anything that might affect it, everything except the htaccess file LOL

You can can create a plugin hook for the file upload action and check for the mime type. You can have a look at the http://docs.elgg.org/wiki/PluginHooks and this discussion which is also a good thread http://community.elgg.org/pg/forum/topic/839506/registration-page/ . There are no free plugins for those functionalities yet.