Your existing code won't work as is. Since it's meaningless to try to convert possibly-binary data to a string, file contents are now returned as a list of bytes. There's a helper called bytes-string for when you're sure you have just ascii data. Otherwise you'll need to know the encoding of text uploads and convert the bytes appropriately.
I should warn you that it's gotten a lot slower. You might need to temporarily up threadlife. I have some ideas for speeding it up, but let's check first if this works for you.
Ah, this is because the fnid field is being read as a list of bytes. I could convert fnid to string as a special case. Another option is to pass it in with the action url like in aform-multi: http://github.com/nex3/arc/blob/46e3820a6b/lib/srv.arc#L560
Update: Ok, I finally found a way to check when it's safe to convert to string, so now all fields (including fnid) will auto-convert to string when possible. If you get a list of bytes you know it has some sort of non-ascii data.