Aviary image editor module is for inline Image editing using the free service API provided at http://www.aviary.com/html5builder.
Once the permission is set and type of nodes selected in settings then as edit image link appears on the image on mouse over on on the nodes types selected. You can see it working at http://aviary.jitrc.com (permission given to anonymous too). Images can be edited in view mode with a inline HTML editor and then saved on the site replacing the original image. The original image is kept in backup with a different name. If the image being edited is from external source the edited image is saved in the site and the link to the image in the node body is modified accordingly.
Git sandbox url: git.drupal.org:sandbox/jitrc/1084860.git