the image system changed in 3.3, see http://ez.no/ez_publish/download/changelogs/ez_publish_3_3/new_image_system.
It looks like you will have to change the template mentioned in your post.
For converting images (size etc.) ImageMagick or GD lib is needed, by default both are activated and eZ publish will use what it finds first. You can configure this stuff in image.ini(.append.php), see e.g. ImageConverters[].
Hope this helps, silke
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