There are three problems:

1. Upload Image only uploads some .png images. I haven't tried other file types. Don't see differences, other than size in the png images I tried to upload.

2. If I use the edit image box, accessed from right clicking on the image, I can't add a boarder or space. It notifies me that it was edited successfully when I click "save & publish" but it doesn't show in the published site.

3. If I click on "Insert Image" while logged on from the computer on which SilverStripe is installed, I get a "Detailed Error 500.0" message. If I click on "Insert Image" while logged on from a remote computer, everything is OK.

Here is the message for problem 3:
HTTP Error 500.0 - Warning: "Parameter 1 to Hierarchy::loadDescendantIDListInto() expected to be a reference, value given" at line 525 of C:\inetpub\wwwroot\MyXSite\sapphire\core\Object.php
The page cannot be displayed because an internal server error has occurred.

Detailed Error Information
Module: FastCgiModule
Notification: ExecuteRequestHandler
Handler: PHP via FastCGI
Error Code 0x00000000

Requested URL: http://localhost:80/myxsite/sapphire/main.php?
url=admin/EditorToolbar/ImageForm&action_callfieldmethod=1&fieldName=Image&ajax=1&SecurityID=8617&methodName=getimages&folderID=6&searchText=undefined&SecurityID=8617&cacheKillerDate=1253039578696&cacheKillerRand=9303

Physical Path: C:\inetpub\wwwroot\myxsite\sapphire\main.php
Logon Method: Anonymous
Logon User: Anonymous

I installed on IIS 7.5, MySQL 5.1.38, PHP 5.3.0
Any ideas?
Thanks