Probably nothing is wrong with your configuration. Your ADSL-line might have a significantly slower upload than download
, so the uploading is slow.
Also, Internet Explorer (at least up to IE6SP1) gives (without registry tweaks) an upload speed of ~80 kB/s even with faster lines, so the upload would take at least a bit more than a minute. The script time out might be set to 30 or 60 seconds, so the upload would time out before finishing.
Try with a 3 or 4 megabyte file, do they work? What about 2 megabytes? So is it just a timeout issue.
Also, some modules have an individual upload size max selection, so check that the 8 MB is really allowed.