hi.
you have to check:
1. settings -> system - Resource Library Upload Max File Size, kB. You'll see input field and php-limitation at right (in brackets). You have to set correct value.
To increase limit upload file size of php try to search post_max_size and upload_max_size.
2. What type of image do you try to upload, jpg, gif or..? By default Abantecart use 4 image types: jpg(jpeg), gif, png and ico. You can extend this list via sql editing.
3. what is in error log (system->logs->error logs)?