Still no resolution to this.  The site does use Windows Authentication but we have many site that use Windows Authentication and none of them have this problem.  Also the problem is a little different than I stated.  The user receives the prompt for credentials after he selects the file to upload and once he enters his user credentials the upload just sits at 0% uploaded. 

 

Again, this is the only site doing this all other sites (and they all use Windows Authentication) are working fine.