I think the problem is in your PHP.INI file. The default upload filesize is usually set to 2mb. I always set upload_max_filesize to 100m. I also increase max_execution_time so it doesn't time out on large uploads. You can easily check this by going to the Admin tab, General Settings, scroll down to Server Settings and click on the phpinfo link.
Ron Conring
Conring Automation Services
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Software for Business and Industry Since 1987