Media not uploading from xml file

I am having a problem when someone wants to join my multisite. If they have a blog that they are moving over and I use the xml file to upload their content, the media fails to upload.

Mainly the images, sometimes a pdf will appear but otherwise no images.

It is not a large file either. This week I was uploading some dummy content to get a feel for how a theme works and there were only 10 blog posts with images. It didn't upload any of the images.

I am not sure if this is a plugin or hosting problem. Any ideas / suggestions / help is appreciated.