Very cool idea - you might want to make it a bit clearer that the sender has to keep the window open (initially I assumed it simply wasn't loading because of technical issues).
there are progress updates, but only after the file begins transferring. also, we can't show you progress in IE, so we just show an animated spinning gif (only in IE)... what browser are you using, and at which step in the process do you feel that we're lacking progress updates?