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Using the admin account I am able to insert images into content using Imagefield. When a non-admin account submits an image, a pop-up error message displays "An HTTP error 0 occurred. /filefield/ahah/page/field_image/0' where page and field_image are part of the naming scheme. Drupal's log shows this as an access denied error, so I believe this is a permissions problem.
This error occurs with and without a custom path specified in the field. All permissions checked for the non-admin account does not fix the problem. The file path is set to the default 'sites/default/files' and downloads are set to Public.