For the large image (used in popups) I use FTP and upload:
/images/large/dvd/a_bugs_life_01_LRG.gif
/images/large/dvd/a_bugs_life_02_LRG.gif
/images/large/dvd/a_bugs_life_03_LRG.gif
/images/large/dvd/a_bugs_life_04_LRG.gif
For the medium image (used as the main image on the product_info page) I upload via FTP:
/images/medium/dvd/a_bugs_life_MED.gif
NOTE: There is ONLY ONE ( 1 ) Medium Image used per Product on the Product Info page: (pages named product_info, product_music_info etc.) The naming is related directly to the original image.
Now you do not need to use subdirectories for loading your images.
All images can be loaded to:
/images
/images/large
/images/medium