Mike, IH-5 saves the additional images, as before, to the site's /images directory.

Is there a reason why you're updating to IH 5.1.1 when the current release is 5.1.5?

When you upload an additional image, are you supplying a suffix or letting IH create one automatically?

After selecting an image with an extension that matches the 'base' product image's and clicking the 'Save' button, does the additional image display on the IH admin screen?

As always, are there any debug-logs 'thrown' when you access the IH admin?