Now that you say it. Most likely
Code:
$size = @getimagesize($FORM['banner_url'])
in classes.php is at fault. You are trying to check width and height via http url, hence "allow_url_fopen" is required. At least was the issue back in the aardvark days
On upload we have the same function, but its from POST data, so it works there
Few things you can do
1) from the code above in sources/misc/classes.php , try to remove the "@" from the code, so the error is not supressed. Might give hints
2) Make yourself a phpinfo.php and upload to toplist root where index.php is
Then check site.com/phpinfo.php and search for "allow_url_fopen". Would bet its turned off.