My previous post about a checklist to solve the upload problems was just a stab in the dark. And turns out it did not work - even when there was no network traffic, uploads would stall and stop. Then I thought there might be some problem with DHCP server assigning IPs which are supposed to be static to random machines. Checked out the DHCP pool, that was all right.
Then, Googling found this post about MTUs. Did sudo /sbin/ifconfig eth0 mtu 1490 on our local machine. Trying an upload, still the same problem. Then tried setting mtu on Colinux with ifconfig eth0 mtu 1490 and that seemed to help Colinux.
This page has a ping test, for seeing what MTU you need, and for the Windows machine, even ping krishna.radiosai.org -f -l 1480
gave fragmentation - so thought 1400 would be a safe number.
But the Windows machine needed a reboot after setting MTU - set with regedit http://support.microsoft.com/kb/900926 for finding which id is which network adapter, http://support.microsoft.com/kb/314053 After doing this, and the reboot, made the changes on Colinux permanent by adding mtu 1400 to /etc/network/interfaces for eth0. And now things seem to be fine, with 2 minute uploads for 10 MB files.
This page has more about the possible reason for this: Path MTU discovery defeated by ICMP packet blocking, and fragmentation also being not allowed.
Edit: Unfortunately the problem persists. So, have to think about other solutions.