I installed this module on a fresh site installation (I was not upgrading from a prior version), and installation seems to not be adding everything.
There were two big problems 1) when I saved a new node the image showed up as a link instead of an image for the Default and WYSIWYG display options. 2) display options were missing (see attached pics 1-3)
The work around was to start with, media-7.x-2.0-unstable3 and file_entity-7.x-2.0-unstable3, and continue upgrading from there to the alpha version. I used (modules: wysiwyg 7.x-2.2 with ckeditor 7.x-1.12, library:ckeditor 22.214.171.124)
More specifically my path was: install unstable3, then upgrade to unstable5>unstable6>alpha1
After this workaround there were more options (see attached pic4), and the images saved in the node correctly for Teaser, Preview, original. The WYSIWYG option never worked for me. I'm not sure what the behavior should be.