No real updates I am afraid. For a couple of reasons. The first is that a couple of large projects have taken my time in the last year and will continue to do so. The second is just absolute belief that I should not release this formally if I don't have time to support it.

Yes, things I think are difficult about Zen and images are :
-- the way the main image is actually the small one
-- additional images in general. why, oh why, they are not stored in the db and have to be hunted by name
Actually, I think that the way of approaching this is to rewrtie sections of core code but that entails a major re-think and is probably not possible without forking.

The problem with gif is just that transparency is hard to handle. I think that that caused issues with watermarking. It is not insurmountable but needs to be worked through with more time than I actually have.