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Okay well viewing your phpinfo I do see one thing wrong.
display_errors is set to ON which php site will tell you that this should not be set to on unless this is a production environment. It should be set to off on a normal website.
As far as your images there is a definate permissions issue here as your not getting thumbnails created.
What image processor are you using? Try using GD. If you try rebuilding thumbnails what error do you get please post that here.
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