This is what I found
If I create a subfolder
images/books
and upload my products main image to images/books, Image manager creates a subfolder for medium and large images this way
images/medium/books
images/large/books
If I upload the image to Main Directory (which is the /images/ folder) , then Image manager creates the medium and large images in
images/medium
images/large
So your client would upload the main image to the images folder or if they are going to upload them by category type then create a subfolder in the images folder
Ex.
images/books
images/glassware
images/tools
Image manager will automatically create the corresponding folders in the medium and large folders.
Once the medium and large images are created, the small image offers a link to shrink the original image and that becomes the small image so you won't need to delete the original because the original is now resized to small.