I have the same troubles. I downloaded a new 1.6 version today and can not upload or generate any images.
I get the image is in the wrong format error. I hope someone can help.
I am having the same problems. I can not add or upload any new images......changing images in the default store this problem is critical. I just installed a new version of this 1.6 and there is the same issue, I get error messages when I try to upload photos.
Is there any fix to this?