File permissions are a common problem for OJS users, and unfortunately it's tough for us to give general instructions because each server is a little different. Once you have your OJS installation up and running the permissions should take care of themselves but sometimes a(n unannounced) server configuration change on the host's side will cause this to rear up.
The first question is where the files directory is. Look in your config.inc.php for the "files_dir" setting. This will tell you where OJS tries to keep submission files.
The second question is what your file permissions on that directory should be. See this FAQ entry
for some information on what to check.
Permissions on that directory need to be set recursively -- meaning not just on the files directory itself, but all of its contents, including files and directories in subdirectories and so on.
If you want to test whether file uploads are working via another method, try the Journal Manager's "Files Browser". Find the folder where submission files for that submission are stored and try uploading the file that way. Note that this won't cause the uploaded file to appear in the workflow -- the files browser exclusively deals with the mechanics of moving files around and doesn't otherwise interact with the system -- but it'll help confirm whether or not you are experiencing file permissions problems.
Public Knowledge Project Team