Ughh. I was missing the forest for the tree's.
The forms encoding type needs top be changed to multipart/form-data.
change:
<form class="NewFromBlank_Default" id="Default_NewFromBlank_Default" name="Default_NewFromBlank_Default" method="post" action="test1.php">
to:
<form action="test1.php" method="post" enctype="multipart/form-data" name="Default_NewFromBlank_Default" class="NewFromBlank_Default" id="Default_NewFromBlank_Default">