Thankyou for the quick reply.

I had all that in place and can post an ad with no pic without a problem.

In the docs it say "The Full path of your ads images location. This location is the destination of uploaded image also e.g : /var/html/location/of/to/upload/image/ads " so I'm thinking it should be some other variable of my addy ie./home/sitename/modules/etc etc

Thats the bit that has me lost

My folders are 777 also.

When I try to post an ad with pic I get the following error
Ads Submission Error
Max File Dimension Allowed in Uploading Image is 200 x 200 Pixel(s)
Allowed File Types are : '.gif', '.jpeg', '.jpg', '.x-png', '.pjpeg'
Please Go Back and Correct the Above Error(s)

even though the pics I try are all smaller than the max dimensions and I've tried gifs and jpegs.