A default install of Server 2008 with IIS 7.5 will force Request Filtering to 1000000 bytes.   That’s 1mb.

So a non asp.net website (i.e. PHP only) will always be limited to 1mb upload size.

This assumes you’ve already updated your PHP.ini with the appropriate size limits as widely documented on the internet.

To fix this, click on your website in IIS Manager.  In the IIS section of the website, double-click Request Filtering.

Now, on the right side click Edit Feature Settings.   There you will find the default limit of 1mb (in bytes), change it to something larger.   Restart the site.