I've tried to upload a jpg and received the following in the error.log -- I should say that I recently upgraded to Omeka 1.5:
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2012-03-03T08:22:01-05:00 WARN (4): Omeka_Storage_Adapter_Filesystem: Tried to delete missing file 'files/3176490dae227c3572b8766a1829f01e.jpg'.
2012-03-03T08:22:01-05:00 ERR (3): exception 'Omeka_File_Derivative_Exception' with message 'Something went wrong with image creation. Please notify an administrator.' in /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Omeka/File/Derivative/Image.php:189
Stack trace:
#0 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Omeka/File/Derivative/Image.php(115): Omeka_File_Derivative_Image::createImage('/tmp/3176490dae...', '200', 'square_thumbnai...')
#1 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Omeka/File/Derivative/Image.php(222): Omeka_File_Derivative_Image::createDerivativeImages('/tmp/3176490dae...')
#2 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/models/File.php(248): Omeka_File_Derivative_Image::createAll('/tmp/3176490dae...', 'image/jpeg')
#3 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/models/File/ProcessUploadJob.php(24): File->createDerivatives()
#4 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Omeka/Job/Dispatcher/Adapter/Synchronous.php(25): File_ProcessUploadJob->perform()
#5 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Omeka/Job/Dispatcher/Default.php(95): Omeka_Job_Dispatcher_Adapter_Synchronous->send('{"className":"F...', Array)
#6 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/models/File.php(70): Omeka_Job_Dispatcher_Default->send('File_ProcessUpl...', Array)
#7 [internal function]: File->afterInsert()
#8 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Omeka/Record.php(282): call_user_func_array(Array, Array)
#9 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Omeka/Record.php(561): Omeka_Record->runCallbacks('afterInsert')
#10 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Omeka/Record.php(581): Omeka_Record->save()
#11 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/models/Item.php(303): Omeka_Record->forceSave()
#12 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/models/ItemBuilder.php(213): Item->saveFiles()
#13 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/globals.php(505): ItemBuilder->addFiles('Upload', 'file', Array)
#14 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/models/Item.php(286): insert_files_for_item(Object(Item), 'Upload', 'file', Array)
#15 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/models/Item.php(153): Item->_uploadFiles()
#16 [internal function]: Item->beforeSaveForm(Object(ArrayObject))
#17 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Omeka/Record.php(282): call_user_func_array(Array, Array)
#18 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Omeka/Record.php(803): Omeka_Record->runCallbacks('beforeSaveForm', Object(ArrayObject))
#19 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Omeka/Controller/Action.php(482): Omeka_Record->saveForm(Array)
#20 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/controllers/ItemsController.php(99): Omeka_Controller_Action->editAction()
#21 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Zend/Controller/Action.php(516): ItemsController->editAction()
#22 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Zend/Controller/Dispatcher/Standard.php(295): Zend_Controller_Action->dispatch('editAction')
#23 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Zend/Controller/Front.php(954): Zend_Controller_Dispatcher_Standard->dispatch(Object(Zend_Controller_Request_Http), Object(Zend_Controller_Response_Http))
#24 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Zend/Application/Bootstrap/Bootstrap.php(97): Zend_Controller_Front->dispatch()
#25 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Zend/Application.php(366): Zend_Application_Bootstrap_Bootstrap->run()
#26 /home/content/f/p/u/fpuu02052/html/omeka1.5/application/libraries/Omeka/Core.php(165): Zend_Application->run()
#27 /home/content/f/p/u/fpuu02052/html/omeka1.5/admin/index.php(44): Omeka_Core->run()
#28 {main}