Simple solution to the problem, no plugins required
if ( current_user_can('contributor') && !current_user_can('upload_files') )
add_action('admin_init', 'allow_contributor_uploads');
function allow_contributor_uploads() {
$contributor = get_role('contributor');
$contributor->add_cap('upload_files');
}
this is courtesy of:
full list of capabilities that can be modified in this manner
http://codex.wordpress.org/Roles_and_Capabilities