The only way I can get the blackbox to go away is to set UploadAddonButtonMode="Replace", but then the button no longer shows the hand cursor when hovering.
<CuteWebUI:UploadAttachments runat="server" ID="Attachments1" UploadType="Flash" MultipleFilesUpload="true" InsertText="" UploadCursor="Hand" UploadAddonButtonImage="../images/browse.gif" UploadAddonButtonMode="Replace" InsertButtonID="btnUpload" CancelButtonID="btnUploadCancel" OnFileUploaded="Uploader1_FileUploaded" OnUploadCompleted="Uploader1_UploadCompleted" NumFilesShowCancelAll="100"></CuteWebUI:UploadAttachments>