blackwidowaust on "Upgrading Wordpress / images cannot upload"

Hi There

I've got 2 issues that I'm throwing out the universe to see if they can be solved:

1.WORDPRESS UPGRADE WILL NOT WORK
I've tried to upgrade from 3.4.2 to 3.5.2 but it will not work. I keep on getting an error message. Is it a matter of changing the permissions on my upgrade folder in wp-content, upgrading it then switching it back to 755?

2. IMAGES WILL NOT UPLOAD
Is this an issue because if haven't upgraded WP or my theme (TryMee 1.2.1)? I can manually override and upload by switching permissions to 777 but I don't want to leave the site vulnerable.

My site is: http://www.stsservices.com.au

Cheers
BlackWidowAust