I dont get the error when I use the following line
FileItemIterator it = servletFileUpload.getItemIterator(request);
I get it when I use
The DiskFileItem class from the Commons FileUpload library uses java.rmi.server.UID internally and usage of this class is forbidden by the Google Apps runtime environment. Since DiskFileItem is caching the uploaded file on the server file system and disk access is forbidden by Google Apps anyway, removing the dependency on the RMI specific UID class won't solve your problem.
Commons FileUpload (1.2.1) is only semi-compatible with GAE. Only streaming API is supported but not the traditional API beacuse a local filesystem is not made available by GAE. In the stacktace, I see usage of DiskFileItem, which basically writes the uploaded file locally and deletes it later.
See the section under Apache Commons FileUpload at GAE and support for Java frameworks
Here's the streaming API usage.