[ URGENT ] Error adding new pictures (after server move)

[Jacob]

Hello Friends,

At last i have shifted my sites to a new Xeon dedicated box but after server move, whenever i try to add new pictures (when i click check new images) its giving following error:
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Warning: rename(PICTURE.jpg,PICTURE.jpg.bak) [function.rename]: Permission denied in /home/mysite/public_html/includes/annotate.php on line 12

Warning: imagejpeg() [function.imagejpeg]: Unable to open './../data/thumbnails/146/PICTURE.jpg' for writing in /home/mysite/public_html/includes/image_utils.php on line 93
Working on data/media/146/PICTURE.jpg file:
Error adding annotation in data/media/146/PICTURE.jpg file.
Error creating thumbnail.
Image added: Blended colors

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 I have image watermark mod installed

Can somebody please help me out... i think i have already installed GD library but i have not checked if safe mod is on or off

Thanks all for your help 

[Jacob]

UPDATE:

GD is installed, just checked 

Thumbnails are created..was a chmod prob

Only prob, image renaming 
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Warning: rename(PICTURE.jpg,PICTURE.jpg.bak) [function.rename]: Permission denied in /home/mysite/public_html/includes/annotate.php on line 12
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I think thats why image watermarking is not working  :

Any suggestion regarding this??

Thanks

UPDATE 2:
Just checked GD2+ with Freetype support is installed
Safemod is OFF

[Jacob]

Bummp

Anybody can help me