A possible strategy for this can be (pseudo-code!):

$| = 1; # keep info to browser going when it's there

# Do some piece of long running stuff; this will
# prevent apache from timing out the connection
# but might need to be called often.

$r->reset_timeout();

# At the same time check that user still cares.
$r->connection->aborted() and stop_it_all();

# While in a browser nearby some clever JavaScript is
# showing "Processing" "dot" "dot" "dot" and can
# be dynamically fed updates by something like

$r->print('<div class="status_"' . $count++ . '>+</div>');

# which is going straight to the JS b/c of $|.
# Probably something client side is the only way to
# give decent status "progress" messaging; the
# mod_perl can send approximations of how much is
# left to go.
[download]

This is a sticky problem. It might be better served with an email receiving queue to take the files, or by breaking them into single file uploads instead of letting a user upload, whatever, 10 large files at once.

It seems likely that because of all the up-front work CGI does you might need to, probably should, write the uploads in native mod_perl so you have complete control. I don't usually use CGI.pm with mod_perl so I'm sorry that's just a guess. It's a fantastic module but mod_perl gives you all its facilities (well, not as easily) and much finer control at every level of the request; not just the reading of the already accepted request and sending the response.

Good luck. (update: added close to div tag, #2: speling problamz)