Unfortunately there is currently no support in browsers to support this.
You would need an extra component installed on the client that can handle
the upload and provide a means of displaying a progress bar (typically a
progress event that can be consumes by the sites Javascript).

What happens if the upload fails? Do you need to reverse out the DB changes?

Consider uploading to a temporary location first, then a post to the server
can update the database and move the file from its temporary location to its
persistent location in a more atomic operation.  If the upload fails, you've
not got rubbish in your DB that you need to clear up.

Without client side component support the only way to upload a file is via a
Form post from the browser.  Unfortunately Form posts were never intended to
carry large amounts of data and therefore no thought has been given to
providing the user with progress info on the upload.

If you're desperate then you might get away with performing the Form post
from a page in an IFrame,  you could have a progress bar in the host page
polling the server and retrieving the size of the temporary file.  I'm not
entirely sure how you would retrieve the expected final size of the file
though (I'm not familiar with the file upload control where you might expect
to get that info, I use a client side component instead).

I've previously come across (but not yet used)
http://www.brettle.com/neatupload - have you seen this yet? I have no idea
if it can be used with an UpdatePanel, but I think it does the other stuff
you mention.

I agree with Anthony though, ideally you shouldn't be updating anything in
the database until you have the file on the server to work with.

Jevon