I took a look through the apache config files on Snow Leopard server, and found that there are a bunch of top-level web "folders" (including /media, as well as /wikihelp, /settings, /webcal, etc) are used for the various web services. When you enable the services, it adds ProxyPass directives which effectively redirects (via a proxy) incoming queries for these "folders" to various other services running on the server. Specifically, when you enable Wikis or Blogs or Calendar services on a site, it adds (via an include) a ProxyPass directive so that any incoming request for /media/* will be redirected to
http://127.0.0.1:8087/media/*, and whatever you may have in your media folder will be completely ignored.
If you want to see all of these "reserved" folders, use the command: "grep -R ProxyPass /etc/apache2" on your server. They're scattered through various config files, so it can be a little hard to tell which are active on which site (and why) without some experimentation.
Anyway, the net result is that Apple's web services use this "folder" name; if you want to use Apple's web services on that site, you'll need to use a folder name that doesn't conflict.