As the readme says, replace all / . and - characters with _ in the defines. I did not mention explicitly, though the example shows, that you need to use all upper case letters.

ADDIMG_SILKS_SILK_CUSTOM_01_jpg
will not work; it needs to be
ADDIMG_SILKS_SILK_CUSTOM_01_JPG

Do you know what version of PHP your host uses? There is no good reason that the unedited files should crash your site, except that the mod uses the PHP function ereg_replace(), which I understand is deprecated in PHP 5.3 and will cause a problem with any script that uses it.

If that is the case, you may be able to change ereg_replace to preg_replace in the code; I have not yet checked on the syntax to see whether there is any difference in usage between the two functions. I will get back on this, and if necessary, release a new version of the mod to account for the PHP situation.