Also, I've found other weird issue: When registering callbacks to events I have noticed that Upload::geterrors() returns a populated array as expected. Like this:
function upload() {
$config = $this->uploadconf();
upload::register('after', function(&$file) use ($config) {
# WTF, Fuel!?
/* this callback acctully does anything but if it exists,
Upload::get_errors works like a charm! (very odd behavior...)*/
Very odd, because the after_save callback is only called if there wasn't an error. And even if the callback was called, it requires an instance of FileError to be returned to add an error.
Can you post your entire upload config, so I can test it here? And what exactly are the rights on the upload folder? read-only? or none at all?