Was this problem ever figured out? I'm having the same problem (5.1.6 fresh install). The settings seem to be correct, the directory is chmod 777'd, and the file seems to upload correctly (in IE or Netscape). But no matter what I do, the attachment never shows up in the post, and the file never shows up in the directory.
I sent an email to my ISP to see if the PHP version supports the "is_uploaded_file" function, but I thought I'd post here at the same time.
Thanks,
John