Hi,

try a cgi upload script on your server first; this will reveal whether the problem is inside apache or inside php.
The problem machine I mentioned before is a managed dedicated server (i.e. a handful of domains owned by the same customer). We can call support to change settings, but they wont recompile any software - and every now and then their patch management will revert some changes they made for us.
Depending on what this "virtual server" really is, it will either force you to maintain the system or restrict you in what you can do with the installed software.
As for "upgrading": a while ago I needed an upgrade - replacing a complete box by one with more cpu and memory. The hosting company charged their usual setup fee for the new server but arranged for the two machines to run side by side for one month, for a smooth transition.

Musicman