If you are using the Async file uploader control in AJAX Toolkit inside an update panel. when you select a file to upload, after selection, the file uploader control will be showing with Red background in the text field.
The fix for this problem is: click on the properties of the async file uploader control -> find ClientIDMode property -> change it from inherit to Auto ID.
Now try to build your web app. and select a file, The control will show the selected file with green background which means it is a valid input file validation being done by the control itself.