In order to run the RadUpload in Medium Trust level you should do only one thing: register the upload handler in the web.config file. In order to do this you have to do the following:
Open (for editing) the web.config file related to the chosen application;
In the "handlers" section append your upload handler.
Registering the upload handlers
<system.WebServer> <handlers> <add name="MyRadUploadHandler_ashx" path="MyRadUploadHandler.ashx" verb="*" type="Telerik.Windows.RadUploadHandler" /> ... </handlers> ... </system.WebServer>
Now you can configure your web site (or the whole web server) to run in Medium Trust level. Of course you can script by hand the command for Medium Trust level (see row 66 in the picture below);