Hi medvetet,
Is your site online? If so, can you send me the uploader test page url? So we can check it.
When you download the demo package? We just fixed a bug about firefox 7 with Iframe mode. Can you download the latest package and try again?
Clean the browser cache and download http://ajaxuploader.com/download/Ajax-Uploader.zip
Do you get any javascript error?
Regards,
Ken