I tried to implement the http://valums.com/ajax-upload/ script on a pyramid project.
The script send the file name as a get param and the file content in the body of the request.
Unfortunately the toolbar crashes the request that works just fine if the toolbar is disabled.
This is what I get in the apache log: https://gist.github.com/1336696
If there is any chance you can reproduce this in later versions of the toolbar please let me know and we can investigate.