To fix ‘The upload file cannot be moved” error in wordpress add the following line to the .htaccess file:

php_flag safe_mode off

Also check for upload directory:

in your worpdress admin goto settings->miscellaneous settings

verify the upload path:

wp-content/uploads
Also check file permissions:

chmod a+w upload
dr-xr-xr-x 28 user group 4096 Jan 21 20:38 themes
drw-rw-rw- 2 user group 4096 Jan 21 20:41 upload