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The removal of this requirement was listed as a feature of 2.0, but derivative images are not being generated automatically. I am using CCK imagefield to display the images, which injects a /files/imagecache/preset/myimage.pic'>, but if the image doesn't exist, it's not created. However, if I enter ?q=files/imagecache/preset/myimage.pic into my browser address bar, the image will be created & displayed (on a blank white page, BTW, not inside Drupal.)