Hello
Check your php info. Usually it only allows max upload of file 2MB so if you do not restrict the filesize in photopost to match and you try to upload a file slightly larger than the max what happens is the server will process the error not photopost and not all php setups are real good about displaying the php error as you know here
You would need to do one of two things
1. Edit the php.ini settings and increase the max file upload size
2. Edit usergroup settings in admin and make max filesize 2048 so Photopost will not allow file uploads larger than your php setting