In a way, this sounds a lot like some of the early chat-room CGIs that were available 4 to 6 years ago. You might look to those for some ideas.

Unless you're uploading the entire database file and it is extremely huge, there are likely better ways for doing something of that nature, such as uploading a dump of the database and having it processed after it finishes. This would also be advantageous because you could test the datafile's validity before starting the import, rather than depending on the connection not to break while loading.

You mentioned having it run continuously-would that not be a case for using mod_perl, where the code is internally compiled once, and the perl executable is run with the webservice? (I may be mistaken, for I have not worked with mod_perl yet. Comments, anyone?)

As for the single stream of output (I assume you mean not reloading pages), you might wish to look at the Content-type of "multipart/mixed" or "multipart/x-mixed-replace" for the output from your script.

Good luck in your search for a solution, and I (and I am sure others) would enjoy seeing what you find as a solution, if you decide to post it.