There seems to be a hard-coded maximum size for images uploaded in WordPress 2.0 – images larger than 3 Mpixels aren’t resized into thumbnails for some odd reason (maybe not to stress the web server?).
If you think your web host has enough horse power to resize large images, go ahead and modify line 89 in wp-admin/inline-uploading.php and change the number three to something higher:
if ( $imagedata['width'] * $imagedata['height'] < 3 * 1024 * 1024 ) {
This should be added to the WordPress Codex.
Tags: wordpress