I've encountered a bug in the uploader control when it is rendered in Silverlight. My application commonly has a query string parameter whose value contains a '\' (which is %5c if URL encoded) and when the uploader is rendered in Silverlight it gives me the "Silverlight: The upload task is interrupted!" exception and cannot upload the file.
This is happening in IE 8 as well as Firefox 3.5.7
Silverlight is version 3.0.40818.0
I have successfully reproduced this on your demo site as long as you add some bogus query string parameter with a %5c somewhere in its value: