The half-grey image issue comes up for non vista users as well sometimes, and *typically* its been due to internet accelerator's, or some type of 'speed up my connection' service or tool running in the background.
When these applications cut down on the amount of data being transferred, or compress the data, you can run into an issue like this where the image is of an unexpectedly low quality, or where the bottom half seems to get cut off.
Try to locate a service running that offers this and disable if possible, then re-try uploading. Try doing one image at a time to verify its working properly before going back to doing batches at once.
