According to Microsoft the FileUpload control is not compatible with an AJAX UpdatePanel.
I am aware that a PostBackTrigger can be added to the submit button of the
I found this the other day when I ran into the same problem: http://vinayakshrestha.wordpress.com/2007/03/13/uploading-files-using-aspnet-ajax-extensions/.
For my implementation, I put the iframe in a modal popup and added a button with style="display:none" to handle the closing of the popup. In the javascript function that watches for the change in the iframe, I added document.getElementById("<%=btnCloseUpload.ClientID%>").click(); for the hidden button.