copy following files from 1.2.1 or 1.3.* version and issue will be solved
app/code/core/Mage/Adminhtml/Block/Media/Uploader.php
app/design/adminhtml/default/default/template/media/uploader.phtml
js/mage/adminhtml/flexuploader.js
js/mage/adminhtml/product.js
skin/adminhtml/default/default/media/uploader.swf **** Backup existing files before overwriting with latest files so that if required you can revert changes