Problems with profile background

I have problems with my web; the users are complaining (I checked it out for myself and they're right) that they can't upload their profile backgrounds. You can, of course, change the background colour, but that's quite lame, as we all know that all the communities now alow you to upload the picture you want for your background. 

I tried to choose the picture from my computer and it won't upload it. I'd like to know why is that? Should I change anything in the admin page? 

Thank you for your help!