Thanks for the link Siebrand. It looks like 1.13 will have significant improvements to the API. I noticed an entry for deleting images but didn't see any entries relating to image upload. Are there plans to add image upload soon or is that a little lower on the list?
You could always use a script which uses the api but also has support for uploading such as mine (low level api access for perl)
http://search.cpan.org/~exobuzz/MediaWiki-API-0.08/
If you wanted to do it in another language, just look at the very simple upload function noting that you need to be logged in on wikipedia to upload (which can be done with the api).
Best Regards
Jools