At least some info to the 1st part of your message:
The Serverconfiguration is responsible for the amount of data a file may contain to be uploaded successfully. Find it out by putting following code into a page of type code:
It gives you all the configuration of PHP ... look for the "upload_max_filesize" variable to find out how much is allowed.
The Flash Player needs to be incorporated into a module to use it effectivly. Somebody did create this here: http://www.websitebaker2.org/forum/index.php/topic,3702.msg30120/topicseen.html