Just tried to upload featured media to a portfolio item and it fails. I get a “try again” link, that opens up the WP dashboard in the uploader popup. Please tell me it’s something stupid that I’ve done and can fix with two clicks….
First, try disabling any active plugins that you have running. Then give it another try. If that doesn’t work, try using a very small image that is under 100kb or so to see if you might be running into a file size issue.
If it still isn’t working, try switching to one of the default wordpress themes (twenty eleven for example) and try and upload an image to a post using wordpress’s featured media option.
Just from the description I can’t say for sure what it is but if we can get a bit more information that will help :)