Add image file programmatically in drupal 6
This is not good job save file in validation phase and really  where you get file from posted data ? 
file exist in $form_state['value']['picture]

mybe below code help you

function yourmodule_form_submit($form, &amp;$form_state) {

    $file = $form_state['values']['picture'];

    $validators = array();
    $file = file_save_upload('file', $validators, 'public://');
....