Interesting, I've never had the issue with pics posting sideways, but I have all of mine rotated before trying to upload them.
There is a pending significant upgrade to the site software that ARC uses. I've delayed upgrading because of bugs, missing features, etc., but will most likely be pushed into using it by the end of the year. There are quite a variety of changes that will come when that happens.
I have to rotate every image I post 4 times back to it's original position and save it to prevent them from posting sideways.
Noted, I'll continue to dig into this one.
Are you using the basic uploader or the flash uploader? Can you tell me what type of device, browser, and browser version you're using?