Nice screenshots.
Let me get this straight - you're trying to upload angel.gif but it is not uploading.
That is very strange, because I just tried it here at work (behind a firewall) and I was able to upload a gif file to my tmp directory of my server 300 times the size of angel.gif.
It has to be something to do with your site - I can't imagine why I can do it and you can't.
Anyone else has the same problem? It works for me.