By using kTorrent for quite some time, I've noted that it only uploads for peers who have an upload slot.

I'm somewhat confused about it's purpose. Does it means that the peer is accepting incoming data from me, or is it something to do with their seeding behavior? If it's the later, This could mean that kTorrent is completely denying to seed for a great number of peers.

Of course, it could just be as my first tough...
... and everyone is happy again.

It's how the bittorrent protocol works, by giving a peer an upload slot you allow that peer to download data from you.