I'm having problems too, my photos won't size properly. When the new release was first launched my photos were being automatically reduced in size, which I did not want. I was able to resolve this issue by switching over to the latest release of Firefox instead of using Safari. A couple of posts ago I started having the same problem again and have just spent 1/2 my evening trying to resolve it, with no luck. I have emptied my cache, uninstalled and then reinstalled Flash (the latest version for Macs running on an Intel processor) and have tried inserting photos into my posts every way I can think of, including as shown in the 2 minute video. I'm not sure what to do but this is not going to work out for me if I can't find a solution soon, which is unfortunate because up until now I have loved WordPress and want to continue using it.