After upgrading WordPress to the latest version 3.5, it can happen that images or any other media can’t be uploaded or inserted into posts. (Clicking on the “Add Media” button does nothing and no images can be inserted into posts.)
To fix this issue, open the wp-config.php file that is present in the WordPress installation and locate the following line :
Now just before it, add the following line :
So the final edited wp-config.php should look something like below:
Save the changes and try creating a new post. The images now can be inserted and edited just like before.
Note : If you are using shared web hosting, this issue shouldn’t normally be there. If it happens, best thing to do is open a support ticket since appropriate privileges to carry out these edits may not be available to you as an end user. For VPS and dedicated hosting, the above solution will work as long as there is root access available.