In time I'd like to be able to link to external images, and if you resize them, it makes a local copy and downsamples the image accordingly :)
Stigm. I'm not sure what you mean by " I cannot sensibly add images to content without the images becoming links to a 'full size' version of the image. This happens when there is no resizing of the image done at all.". It sounds like you've hit a bug, and if so, please provide more detail so that we can reproduce it at our end, and fix it. Mention your browser and OS. It is also best to list at open.silverstripe.com, in our bug tracker.
Its possible we should disable the right-hand image popup properties given they cause problems.
Fuzz: Similarly, can you describe if all resizing in IE to you doesn't work, or only some situations?
Is your bug different to this one I raised?