When uploading a file, the name of the file is not URL encoded in the JavaScript on upload_confirmation.tmpl. What this basically means is you can't create a new post from an uploaded file with spaces in it.

Here's a snippet of code showing the problem:

function doShowHTML (f, mode) {
var url = '/cgi-bin/mt/mt.cgi?__mode=show_upload_html&blog_id=2&url=http://myHostName/photo/you lied, you're fired.jpg&site_path=0&fname=photo/you lied, you're fired.jpg&' + mode;

The spaces in the file name prevent me from being able to click a button to create a new post with the image (though it is uploaded correctly).

This was pretty confusing, until I figured out the problem. Of course, I am a programmer. Not looking forward to having to support users on this one.