Increase the Maximum Upload Size for File in WSS3.0 by following steps,
- Open “SharePoint Central Administration” Site in Administrative tools.
- Click “Application Management” link
- Under SharePoint Web Application Management, click Web Application General Settings.
- In the Web Application General Settings page search the Maximum Upload Size field and change the file size.
- Click OK to configure the change.
For additional details regarding this, refer http://office.microsoft.com/en-us/winsharepointadmin/HA011607881033.aspx