This problem is currently being investigated. Until it can be corrected, the recommended solution is to set FileUp's UseMemory property to "false".
If the intention was the force the upload to be cached to memory instead of to disk, then the better design strategy is to remove the use of the HttpModule for this page and leave UseMemory set to "true". This is because the HttpModule was designed to intercept the upload before ASP.NET caches the upload request to memory. The HttpModule is best used when you want to cache the upload to disk.
For further reading: