All other file uploads go OK 
, tried upload from network and local drives.
still noooo..................oops, try before you type.
Turns out your the man 
, PHP temp file location is defaulted to system "tmp".
On 2K3 this must be secured a bit tight, specified another folder in php.ini and solved the problem.
Thanks 
P.S. Running on IIS / W2K3 / PHP 4.3.4 (ISAPI)