@andi, you're wrong in saying "users who can install Chrome frame can also install Chrome". Because a) you don't need administrative permissions to install it and b) especially in those cases where IT departments need to keep IE6 (to support shitty third-party apps), Chrome Frame is the *only* solution. Because it's just an add-on, it's as simple to install as e.g. Flash and users won't need to be trained etc.
FYI, jQueryUI is planning to add a file uploader:
http://wiki.jqueryui.com/w/page/12137894/FileUploader. Although I doubt it's of any relevance for this task right now, but it's interesting nonetheless. And some of the already existing jQuery plugins they list might be interesting (for this task it's too late, though, but for an upcoming alternative plugin it might be of interest).
Regarding adding the ArchiveUpload plugin, you're right that something like this shouldn't be added after an RC.
I guess there are three main problems:
1. We are *removing* functionality that was already there and working.
2. The amount of users who won't be able to use the multiple file upload will be around 50%!
3. As @adrianlang said, this might be a reason why people won't upgrade.
I'd say the only valid argument against any "solution" is that this feature wasn't used by many users anyway. But is that true?
Maybe we could start a poll to see how many users are using it?