One of my clients using SharePoint 2007 were uploading some files to their site recently and got the following error:
The following file(s) have been blocked by the administrator
By going through Central Administration, I was able to unblock the file and allow them to upload the particular file to the library they were wanting uploading to. After opening up Central Admin, Click on the Operations Tab and look at the Security Configuration Section. Under it you will see Blocked File types (Forth Down), click on it. This by default selects your default site, if required change this. You will now have a large list showing all of the blocked file extensions, allowing you to add and remove them from the list.
In this case we wanted to allow MSI files so they could deploy a setup file through SharePoint as a storage point should users need to re-install. Remove the offending file type and click OK which takes you back to the operations page.
Simple as that, now going back into your SharePoint site, you can see that the file type has now been allowed and can be uploaded to the libraries you are using under the site it was enabled for.