After transfering sites to another server (TUS hosting does not offer rent-a-host anymore, they still have offer on web page, but via email they request to release server) image upload become unusable. Image was uplaoded, then wordpress stops. Nothing. Images was uploaded but cannot continue with inserting them into post. Just like in this thread.

After adding folowing files to .htaccess file everything works ok now.

php_value max_execution_time 600
php_value memory_limit 256M

Site transfers are in most cases painful operation. One down, how many to go?