There are 2 bugs related to the php.ini configuration.
First the flash uploader fails (it doesn't do anything, resets back to a blank state, so user does not konw what happened to the upload) when the file uploaded exceeds the limit set by $upload_max_filesize.
Second, non-flash upload will get stuck in an endless loop and show the uploading picture when the file uploaded exceeds $post_max_filesize. The easiest fix to this is configure the server to allow larger files, but that is not always possible. The script should fail after the $upload_max_filesize and $post_max_filesize are exceeded and a warning shown telling the user of the problem. Otherwise the user can literally try uploading something without konwing of the problem.
Finally, the flash uploader does the oddest thing when you try to upload a file that exceeds the $post_max_filesize. The uploader shows the progress and then on refresh after upload, the page is bisected iwth an insert of the home page as shown below. The red circle shows the user as guest, the blue square is the page that is loaded when the file exceeds $post_max_filesize:
