I’ve had several clients ask about this, and my answer to date has been “It’s a known ‘feature’ or bug.” I just ran across this Microsoft KB article that shows you how to fix this issue by loading the 953749 hotfix:
You use Microsoft Office SharePoint Designer 2007 to add a Custom List Form Web Part on a Microsoft Windows SharePoint Services 3.0 site. Then, you try to attach a file by clicking Attach File in the custom form on the Web site. When you do this, you receive the following error message:
This form was customized not working with attachment.
There are further steps you will need to take in your forms, depending upon how you have built them, and these relatively simple steps are outlined in the KB article.