Reusable file upload logic for Magento Models. Good for use in observer classes when image fields have been added to flat table entities such as CMS Page objects.

uploadModelFile.php

<?php

// Example Usage for cms/page objects.
// cms_page_prepare_save event observer logic:
// 
// $model = $observer->getEvent()->getPage();
// $this->processFile($model, 'image_1', 'cms/page', array('jpg', 'jpeg', 'png', 'bmp', 'gif'));


    /**
     * Handles processing the upload logic for model files.
     *
     * @param Mage_Core_Model_Abstract $model
     * @param string $field
     * @param string $dir
     * @param array $ext
     */
    protected function processFile($model, $field, $dir, $ext = array())
    {
        $filename = $_FILES[$field]['name'];
        $fileSet  = false;

        switch ($_FILES[$field]['error']) {
            case UPLOAD_ERR_OK:
                if (false == ($fileSet = $this->saveFile($model, $field, $dir, $ext)) ) {
                    $message = $helper->__('Error uploading "%s"', $filename);
                    Mage::getSingleton('adminhtml/session')->addNotice($message);
                }
                break;

            case UPLOAD_ERR_CANT_WRITE:
            case UPLOAD_ERR_EXTENSION:
            case UPLOAD_ERR_NO_TMP_DIR:
                $message = $helper->__('"%s" not uploaded due to server misconfiguration. Please contact a developer.', $filename);
                Mage::getSingleton('adminhtml/session')->addNotice($message);
                break;

            case UPLOAD_ERR_PARTIAL:
                $message = $helper->__('"%s" only partially uploaded, please try again', $filename);
                Mage::getSingleton('adminhtml/session')->addNotice($message);
                break;

            case UPLOAD_ERR_FORM_SIZE:
            case UPLOAD_ERR_INI_SIZE:
                // TODO: Some additional information may be nice here on what the maximum allowed size actually is.
                $message = $helper->__('File upload too large: %s', $filename);
                Mage::getSingleton('adminhtml/session')->addNotice($message);
                break;

            case UPLOAD_ERR_NO_FILE:
            default:
                break;
        }

        if (!$fileSet) {
            $value = $this->getDeleteFlag($field)
                ? null
                : $model->getOrigData($field); // necessary since POST data sends array

            $model->setData($field, $value);
        }
    }

    /**
     * Handles uploading a file to the server and storing the path to it in
     * the model class.
     *
     * @param Mage_Core_Model_Abstract $model
     * @param string $field
     * @param string $dir
     * @param null|array $ext
     * @return boolean
     */
    protected function saveFile($model, $field, $dir, $ext = null)
    {
        $uploader = new Varien_File_Uploader($field);
        $uploader->setAllowRenameFiles(true);
        $uploader->setFilesDispersion(true);
        $uploader->setAllowCreateFolders(true);
        if ($ext) {
            $uploader->setAllowedExtensions($ext);
        }
        if (false == ($result = $uploader->save($dir))) {
            return false;
        }
        $model->setData($field, $result['file']);
        return true;
    }

    /**
     * Returns flag indicating if a file for a model should be unset.
     *
     * @param Mage_Core_Model_Abstract $model
     * @param string $key
     * @return boolean
     */
    protected function getDeleteFlag($key)
    {
        $param = Mage::app()->getRequest()->getParam($key, false);
        return $param !== false && isset($param['delete']) && $param['delete'] == '1';
    }