From the start, whenever I tried to upload a larger file to WordPress from an external editor, I always ran into an “500 Internal Server Error”. Just how many images etc did I have to scale down because of this, I alone know. I decided to get off my bum and research this a bit, and found that it is a problem prevalent with some web hosts, where the services tend to revert back to PHP4 by default. The fix is simple. Add the following to your .htaccess

AddType x-mapp-php5 .php
AddHandler x-mapp-php5 .php

And Bob’s your chum.