Here's a check list to diagnose the problem.

1) As always, make sure this server passes the server compatibility test.

2) Be sure the ssp_director/p.php file exists in your install. If not, re-upload it from the installation package.

3) Check the System Info screen of your install (once logged in to Director, you can find this link in the upper right hand corner) for more information about your setup. If your memory limit is less than 32MB, it probably needs to be raised. More info on that here.

4) If your preferences pane reports you are using ImageMagick, you may want to try GD instead to see if that helps. Here's how to do that.

5) Check your config/user_setup.php file and make sure there is no trailing space after the closing PHP tag (?>). The best way to ensure this is to simply remove that closing tag altogether.