Very interesting.  I am making a birthday invitation for my son’s first birthday party and I uploaded a jpg to my server and sure enough when I tried to view it I got the red x as though it was missing.  I first thought it was a size thing and then resized it obviously and tried again.  The same thing happened.  Then I finally realized oh crap, it is CYMK formatted so that it can be printed out.  I then did a simple Google search and found that IE8 does not support this.  I tried the pic in Opera and Safari with both working properly.  Very weird.  So if you run into this problem, at least you know why!