This was recently driving me nuts. I couldn’t get my self-hosted WordPress installation to allow more than an 8MB file upload. My WordPress system is installed on a Mac currently running OS X 10.8 Mountain Lion, using the system administrator’s Web Sharing (which shares documents from /Library/WebServer/Documents).
Eventually I found the solution. You’ll need to be able to sudo to perform these steps (if you don’t know what sudo is, I recommend you don’t try this). Also, AFAIK, this will only work on OS X systems using the built-in PHP and Web Sharing to host WordPress. The solution to allow larger file uploads was: