The FileReader API allows you to do some cool things, but I wanted to avoid chunked uploading for a few reasons. First, it's way more complex to handle given the way our app currently deals with files, and second, there isn't nearly as much existing browser support for both the Blob interface and FileReader in general. This post deals a bit with the current state of things:

http://www.filosophy.org/2010/06/a-state-of-limbo-the-html5-...