Hello Vesko and Charles,
I think that the issue on Charles' end is that the website is not properly configured in IIS (if you are running the website there). If you get a success message when you upload images and you get HTTP 404 error when trying to open the url of the media item in most cases this means that your website is missing the wildcard script handler mapping to aspnet_isapi.dll. You can see how to configure this for different versions of IIS here
. Also please check if you have created a page called images. As this will create a url /images and will mess up library urls with the page url.
the Telerik team
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