Our upload interface came under some heavy criticism from a usability expert at Wikimania hacking days. The point was well taken by the dev team, and we discussed ways to improve it at the time. In particular, we proposed to implement a wizard-style interface allowing upload to either commons or the local wiki.
XForms would be ideal to deal with it + and they can be implemented very fast. Only problem is the lack of support - but there's a solution for simulating XForms-Behaviour using AJAX: http://ajaxforms.sourceforge.net/
Introduction to XForms: http://www.w3.org/MarkUp/Forms/2003/xforms-for-html-authors.html
Part 2 - handling "wizard style forms": http://www.w3.org/MarkUp/Forms/2006/xforms-for-html-authors-part2.html
greetings
-- Julian Fleischer aka Warhog