I can confirm that this does not occur on windows. I will test it on the latest mono from svn this weekend and if it does the same there I'll post a bugzilla on it.
It also does not happen with Firefox on mono. My first guess is that Path.GetFileName on linux doesn't understand c:\blah\blah which is passed up from IE and therefore treats the whole thing as the file name where it would understand a linux path like /blah/blah/somefile
I can't prove it obviously because I can't upload a file from IE on linux
Thanks,
Joe