A classic UX problems is communicating to users how long they’ll have to wait before their task completes. A spinner or progress bar provides feedback that the system is, in fact, doing something, and how long that task may take. Psychologically, progress bars create tension while progressing, and resolution when completed.
From a technical standpoint, progress bars are black magic. The developer is attempting to estimate a task based on potentially thousands of variables. In the case of a file upload, the developer has to deal with differing network conditions, disk performance, etc, etc, etc. Then they have to write the code to communicate what is happening to the browser. Not a trivial task. However, when executed well, can provide the user with reasonable feedback about their task.
Lately, sites like LinkedIn, Mint.com, and OKCupid have used that same tension to motivate users to completely fill out their profiles. During profile creation, a progress bar is displayed indicating how far the user has come along. Once the user completely fills out their profile, the progress bar hits 100%, and what changes? In most cases, nothing. The progress bar is just a psychological hack to entice users to go through the entire process.
The question is: Exactly how effective is the progress bar at enticing users to fully complete the task at hand? And are they actually worth it.