Thanks, I changed it to use the Search API and it's working as it should now.

It looks like this was my own fault - I was not changing the Destination via the Change Destination button because I thought I'd basically done that by hitting the tree view and highlighting the folder before hitting Upload Media.

do you mean incognito tab? Unfortunately that's disabled on our machines, so I can't test it, and again, it's not an issue on our development machine. I also only have a few extensions active - Google Docs and McAffee DLP Endpoint. IE 11 does the same thing...

The user has most of these, but I also just found that super admins also get the same error when uploading an image.

So, it turns out that I was wrong and that I'm getting the same error as a super admin user as well. I've updated the question.

@jrap It is only happening in one environment. As I mentioned I checked the logs but don't see any errors there. I haven't checked the event viewer, so will do that next. By "regular user" I mean not a super admin. The roles they inherit include Sitecore Client Authoring, Sitecore Client Publishing, Sitecore Local Adnministrators, Sitecore Client Users, Designer, Analytics Personalization, Author, Analytics Testing, Sitecore Client Securing, Sitecore Client Social Authoring, Sitecore Client Account Managing. HAMMER, huh?

Yes, that's what I'm saying, in the access viewer the folder that the file is being uploaded to has create and read access for the user who is doing the uploading (but is not able to).

8.2. The folder in question has read and create access for the user in question in the access viewer. I'm not exaclty sure what you mean by "media folder access"

It's odd, this initially fixed the issue (changing it to $now) on both our dev and production servers, but after a new release the production server is showing yesterday's date again. Timezone is set the same in sitecoresettings.config (700), and $now is specified in both the Standard values as well as the default value field for the date field. The odd thing is that if you click on the "today" link after an item is created, the date changes to the correct one, it's just the initial value that is showing yesterday's date - but only on our production server, not our dev server...

Yes, I've done that, and it doesn't do anything.