On the SitePoint PHP blog today Craig Buckler talks about uploading large files in your PHP application. He points to two other resources - this manual page and this introductory tutorial about handling file uploads to get the ball rolling.
One of the most popular uses is image uploads. Your users can submit photographs from a form without resorting to FTP or other convoluted methods. HTML5 and Flash also permit drag and drop, so the operation is likely to become easier as browsers evolve. This is where the problems can begin.
He points out the large size of the images most modern cameras work with and how PHP, with its basic settings, can't handle a lot of the resulting images. He mentions the upload_max_filesize and post_max_size settings you can set in either your php.ini or via an .htaccess (or even in your script). There's also a few helpful comments with more tips on large file handling.