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What does "The system cannot find the path specified." mean when I try to upload?

Your file (/storedir/prodimages/giant/123-1.jpg) could not be saved to the server: The system cannot find the path specified.

In this situation your product images will also not display correctly in the product admin area.  This is probably because the Store URL set in your store admin's main settings page is incorrect.  It should look something like this example, and should have nothing added to it unless your store is in a sub-folder, in which case it would look like http://www.myectstore.com/store/