If you are using the PHP server model you need to follow the next steps for the image functions to work (thumbnails, crop, sharpen, etc):
Download and install the GD image library.
Edit the php.ini file
to enable the GD library.
Note: to locate the php.ini file,
use the same method as explained for the file
upload configuration.
Download and install the ImageMagick library. Follow the instructions in the downloaded package.
After installing ImageMagick you must grant the user as which the web server runs the right to execute the program (ImageMagick comes as a standalone program). The way this is done depends on the operating system existing on the server.
To grant execution rights on a Microsoft Windows operating system follow the instructions:
Navigate to the <windows root folder>\system32\ folder.
Right-click on the cmd.exe file and from the pop-up menu select the Properties item.
Click on the Security tab. From the user list select the Internet Guest Account ([MACHINE_NAME\IUSR_[MACHINE_NAME]).
From the Allow column, check the Read and Execute option.
Click OK to apply the changes.
On Mac OS and *NIX you do not need to take any extra steps in order to use ImageMagick.
The last step is to allow read and write access rights on the folder where the images and files will be stored. If you have already configured file uploading, you do not need to take any further action. Else, follow the instructions here to grant access rights on the upload folder.