Since I am using the MOSS RadEditor Hi; we've fixed the issue by modifying the
| <property name="MaxMediaSize">51200000</property>
| <property name="MaxFlashSize">51200000</property>
in the listconfigfile.xml and configfile.xml in the resource folder.
On a side note, I think it's silly that such properties are removed from the config files. Wouldn't it better to have all the properties listed in the config files, and commented out, so that users wouldn't have to go digging around the internet to figure out what the property names are?.
Also on another note, even though we were able to successfully increase the upload size , We still can't use the media manager and flash manager in SharePoint lists, because sharepoint erases anything with an "<object>" tag. Very disappointing. I hope Telerik is working with microsoft on a fix for this. i've seen posts such as http://erte.codeplex.com/ that suggest this is a deffinite possibility.