I am using D7B6 on a server with PHP 5.3 and could not upload images with .jpg extension. After some detective work, it turns out that "JPG Support" was expected in GD.
File name: inc/classes/BxDolImageResize.php
Function name: _createGDImage()
Problematic line: if ( !$this->gdInfoArray['JPG Support'] )
Suggested fix: if ( !$this->gdInfoArray['JPG Support'] && !$this->gdInfoArray['JPEG Support'])
