Check your settings as if I preview a ecard mine are served through watermark.php. Globals onthefly must be 1
if ( $Globals['onthefly'] == 1 ) {
$imgdisp = "<a href=\"{$Globals['maindir']}/showphoto.php?photo=$inputphoto&size=big\"><img
width=\"$medwidth\" height=\"$medheight\" src=\"{$Globals['maindir']}/watermark.php?file=$storecat/medium/$bigimage&sort=$sort\" border=\"0\" alt=\"\" /></a>";
Third from the bottom in admin showphoto options is this
Enable on-the-fly image protection
This option uses the watermark.php script to serve images