What editor are you using to edit your files? The reason I'm asking is seeing your code all strung into a single line like that. It should be formatted and organized like the code below. Just a guess, but maybe your editor is somehow messing up the code. Since it's just an html file in theory what you have should work ok, but who knows, hard to tell unless I could see the actual file. Try copying and pasting the code below and save the file as "photos_upload.html" and upload it again.
I've mentioned this before, never use WordPad or regular NotePad to edit code. It's also not a good idea using a live FTP editor or edit files via the site manager.
http://forum.datemill.com/index.php/topic,2457.0.html<form action="{tplvars.relative_url}processors/photos_upload.php" method="post" enctype="multipart/form-data" id="photos_upload_form" class="edit_form">
<fieldset>
<legend>Find the image(s) you want on your computer</legend>
<p>{output.photos_remaining}</p>
<ul>
<li><input type="file" name="file1" id="file1" /></li>
<li><input type="file" name="file2" id="file2" /></li>
<li><input type="file" name="file3" id="file3" /></li>
<li><input type="file" name="file4" id="file4" /></li>
<li><input type="file" name="file5" id="file5" /></li>
<li><input type="file" name="file6" id="file6" /></li>
</ul>
</fieldset>
<fieldset id="privacy">
<legend>Choose the privacy settings</legend>
<p><input type="checkbox" name="is_private" id="is_private" value="1" /> <label for="is_private">Private photo?</label></p>
</fieldset>
<fieldset class="controls">
<input type="submit" id="btn-upload" class="button medium" value="Upload" />
</fieldset>
</form>
<script type="text/javascript">
var lang=new Array('{output.lang_257}');
</script>
<script type="text/javascript" src="{tplvars.relative_url}js/photos_upload.js?v={tplvars.js_lib_v}"></script>