I have checked
/skin/adminhtml/default/default/media/uploader.swf
/skin/adminhtml/default/default/media/uploaderSingle.swf
/skin/adminhtml/default/default/media/flex.swf
/app/design/adminhtml/default/default/template/media/uploader.phtml
/app/design/adminhtml/default/default/template/media/editor.phtml
these are present also Given full permission to Media folder php.ini max upload value set to 128M
When was it last working, have you checked it? Because this happens due to many reason. I would recommend to uninstall extensions which you have installed after which your image upload stop working.
Check your error.log and system.log for more information.