Wow - I did not even consider that! Thanks for the heads up. But I thought it used to process the image anyway and changed the filesize - so a 150K image would then be served as a 15K image. Would checking that box affect that?
While in that page - do you see how the cached images are pointing to a directory with two slashes (//) after the image_cache folder? The images still appear but not sure why two slashes?!