I found this problem posted on the wordpress.org forums:
http://wordpress.org/support/topic/161778
I'm experiencing the same problem with my users when I go to the Browse tab on the image/file uploader on the posts page.
Any clue why this might be happening?
For those so inclined, I was able to resolve my problem by adding the following to my vhost.conf file:
<Directory "/var/www/vhosts/yourdomain.com/httpdocs">
php_admin_value open_basedir none
php_admin_value safe_mode off
</Directory>
Hope this helps someone in need!