Drupal form does not save the user input value in the $form_state array This question extends a prior question. I the previous one, I found several errors relating to coding, and thought I had solved the basic question, only t discover that it still is not working correctly.

I have a form to get a file name for opening (http://pastebin.com/8NfGGNSn). When I set the form field type as a textfield, the form widget saves my text entry (in the $form_state ['values']['upload_file] field). When I change the form widget type to 'file' the entry text from the form is not saved. My browser is Firefox and it makes available a browse button and a file selection window in the form. When I select the file from the window dialog, the form widget is completed with the full file path, however, it appears that the path text in the widget is not being placed in $form_state[values][update_file]. It remains empty. IN both textfield and file cases I am checking the value of the $form_state array during validation, so there should not be any clear or reset activity at that point. Any ideas why the content is deleted from the widget? OR does a file name get saved at another location?
File input fields work differently than other input fields. This is a restriction of HTML. The file path is not transmitted to the server, because it is considered sensitive information. Only the file data and the name of the file is transmitted to the server. 

Use file_save_upload() to save the file. To find out what to pass as the $source argument, print out both $form_state[values] as well as the $_FILES array.