I need to upload 100-200 MB files, solution that I found was to use Uploadify or SWFupload. (any takes on which is better to use?).
Now I'm going to set it up , but knowing that my server only accepts files under 3MB via regular post file, do I need to change the php.ini settings to have these large files upload or will the flash uploader take care of that for me?
The process behind any client side scripting is processed server side. If you are using PHP then yes, you MUST change the configuration from php.ini to accept larger file size.
SWFUpload and Uploadify are client side - it means it runs on client browser and sends data to a file processor, in this case PHP, that file actually uploads the file and not SWFUpload or Uploadify.
