Here is a pretty good file upload tutorial. You can also check out the 'Handling File Uploads' in the PHP manual.
But if you are just going to be uploading text files, it would be easier just to enter the data into a form field and submit it via POST (unless it has something to do with usability, which I can understand).
But anyways, if your data will always be space-delimited with consistent fields you can just explode each line using the space as a separator.
$line = "XXXXX 1004567 I09890990 DELACRUZ, JUAN 01/09/06";
$data = explode(" ", $line);
echo $data[0]; // Output: XXXXX
echo $data[1]; // Output: 1004567
echo $data[2]; // Output: I09890990
echo $data[3]; // Output: DELACRUZ,
echo $data[4]; // Output: JUAN
echo $data[5]; // Output: 01/09/06
Just watch out for names with spaces, like 'DE LA CRUZ' and 'MARY GRACE'...they will cause your fields to get messed up.
A more complex, but possibly more effective, method would be to use regular expressions -- but you'll have to ask one of the regex masters to assist you with that. Unfortunately I'm not one of them.