they are stored in the bmz_cache folder that you uploaded with this mod.

The best thing to do is upload the largest size you need and no bigger, i.e my large images are 500 x 500 max, but my supplier gives me 2500 x 2500 and that is just overkill (in fact at first before i realised it was at a complete standstill because of this) resize the image to the largest size you need, squash the filesize if you can and then upload, image handler will do the rest for you.