The usage of an unique upload ID ensures at their end that the progressbar iframe always gets the right data. It refreshes using AJAX technology: http://pastebin.com/f56b8c8f4 I'll take a look if this might be applicable to put into MW.
Yes, that seems similar to the original proposal: track the status of the opload on the server side, store the status in some cross-request cache (like APC), and query it using JavaSCript (as an iframe or by injecting html doesn't really matter). That's a *little* lighter on the client, but still quite a fugly hack, ant not very reliable, IMHO.
-- daniel