Uploading from within fieldset using drupal 6 forms API not working
Add this to beginning of your form 

You need this:

$form['#attributes'] = array('enctype' =&gt; 'multipart/form-data');


Also:  

file_save_upload($source, $validators = array(), $dest = FALSE, $replace = FILE_EXISTS_RENAME)


you have

graphic1 = file_save_upload('graphic1', file_directory_path(), FILE_EXISTS_REPLACE);


you should have

$graphic1 = file_save_upload('graphic1',,file_directory_path(), FILE_EXISTS_REPLACE);


One thing I've noticed in D6 with file uploads is that using only file_save_upload() will result in your file being purged on a subsequent drupal cron run. This happens because all files are uploaded in Drupal with a status of 0.

Therefore, you should be calling your hook_submit more like this...

// Save new file uploads.
if ($file = file_save_upload('file_upload', $validators, file_directory_path())) {

// Do something with $file here.

//Make file permanent
file_set_status($file, FILE_STATUS_PERMANENT);
}