I am using Firefox11 on Windows7. It works fine for me uploading to a nanobsd system, on 2.0.1 and 2.1. After browsing to the file then pressing upload the top of the display says:
Uploaded file to /tmp/filename
and executing "ls -l /tmp/filename" lists the file as expected.
So there must be something else special about your environment.
I'm seeing some problems for sure, I guess that Squid f*cked more stuff up somehow perhaps then.. This was a freshly installed box though, actually only the various Squid packages have been added and messed with. I guess I'll do a reinstall soon if things don't start to work as expected.