Was asked today about this and thought it high time I blogged it.. As I understand it, Sharepoints blocked file types is a file extension blocker,not a content blocker.

For example, if you wanted to block AVI files, and you renamed the extension AVI to MPX that the AVI file would still be blocked – thats not correct. If you need to block files based on the content you’ll need to use a product like ForeFront Security for SharePoint.

It can also block files that contain bad language or terms you configure with it’s content filtering mechanism. As for uploading, there isn’t an OOB configuration you can make on a list or library to restrict the uploading of specific content types.

I would look at programmatically limiting the upload function to specific file types – for example, you could build a directive that activates everytime a new document is uploaded and delete the document if it´s from a specific file type. Am going to do a bit more digging on this and will update this blog entry again soon.