We using Confluence 5.6.3
Steps to reproduce the bug:
In Chrome it works fine. A workaround is to upload the images via page attachement and insert the image afterwards.
What can we do to fixing the bug?
The best way to fix 80% of bugs is this: http://www.wikihow.com/Uninstall-Internet-Explorer-Completely
So you can try to watch into log file. But i think that you have a bad build of IE :/ try update to newer.
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