i have no idea what their problem is... i see it just fine... others have no problems either. you must be doing it fine.
eyeronic: open the pictures up with explorer, not whatever picture program you are using... do they come right-side up for explorer? if so, then take an old boot and throw it in the direction of redmond, washington to beat those damn msn servers into shape.
as for other file types, msn will only allow you to upload pictures. no other file types will be allowed.