Linux/unix file systems are permissions based, so you may have to set the permissions in the directory that you are saving to.
Look up chmod in your Linux user manual.
$upload file, use this variable to store the content of your file.
Ie, if you were storing some text, it might be:
$upload_file = "Hello";
I am going out on a limb here, but would i be correct in thinking that you have an online form, in which a user can browse for an image file, before uploading it.
In which case, $upload_file would be the content of your input form.
Eg.
$image = $HTTP_GET_VARS["image"];
$upload_file = $image;
Hope that helps.