heres what to do
update your device to the newest software (ios6). you can update by going to settings/general/software update. or by connecting your device to iTunes.
open the safari browser and go to etsy.com
click the list new item link and upload your pics. IT WORKS!!!
make sure that if you are taking pictures with your iPad you hold it horizontally with the home button to the right. otherwise your pics will be sideways/ upside down.
i also tried uploading pics from my camera using my camera connection kit. no problem.
i have not yet tried it with the iPhone but i suspect it should be similar.
im going to list an item from my rooftop tonight, then the bathroom, then the treehouse...