The impression i get from your post is that your issue is less with the droid than it is with craigslist and or windows, right? What i mean is, you go through all the steps you outlined and your picture that you transferred from your phone into the my pictures folder is viewable and is there on your computer.
So...the Droid x took the picture just fine and you were able to transfer it to your computer but you can't seem to upload it to craigslist now.
The problem is simply the picture you took, likely 5mp or 8mp is too large a file size for craigslist to upload easily. File size on a digial photo can vary widly based not just on resolution (megapixels) but also what the subject of the photo is. For instance, an all white or all black picture with nothing else in the frame taken at 8MP will output a much smaller file size than a picture of a multi-colored flower garden with millions of flowers taken at the same resolution of 8MP.
So...your other pictures were either simple, undetailed photos or you changed the megapixel settings within the camera.
Go into camera settings and change the resolution to less than 5mp....anything will be good enough for craigslist and the file size will be much smaller.
Let us know how it works.
Oh....and you are uploading them to Craigslist not downloading them. 
