I KNOW WHY !!!!

the CB profile image is located in your www.yourdomain.com/images/comprofiler/

and guess what...I dont see the directory "comprofiler" there after i check using my FTP...STRANGE !

I came to realize it when i installed locally and run and i can upload image for profile and WHY I cant in my hosting...

So, I right click on my local version of CB and see its path, to my suprise...So, you can manually create that comprofiler folder inside the /images folder and make it chomd to writable.

Good luck.