I’m trying out a new WordPress plugin: Image Manager. So far, it looks like it can do everything I’ve wanted the WYSIWYG editor to do (resize, crop, edit, save, folders, etc.) and it does it all in WP 2.0.x. I’ll give it a run and see how it goes. Here’s a demo video Per Søderlind put together to show how it works.
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I really love this plugin too. It’s quite powerful.