A documented FORM bug with IE regarding setting "enctype" on the fly http://verens.com/archives/2005/07/06/ie-bugs-dynamically-creating-form-elements/ happens with dynamically created FORM elements in Prototype 1.6.
For example, the following code...
var theForm = new Element('form', { id:'myFormID',name:'myFormName',method:'post',action:'myPage.php',enctype:'multipart/form-data'});
... does NOT actually produce a form with the equivalent of "enctype='multipart/form-data'" . IE requires an additional "encoding" parameter to achieve the proper form encoding:
var theForm = new Element('form', { id:'myFormID',name:'myFormName',method:'post',action:'myPage.php',encoding:'multipart/form-data',enctype:'multipart/form-data'});